SIXTEENTH CONGRESS OF THE PHILIPPINES 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S.B. No. 
2777 
) 
) 
) 
INTRODUCED BY SENATOR SONNY ANGARA 
'15 
MRY25 A10:06 
"AN ACT TO ENFORCE GREATER ACCOUNTABILITY IN PUBLIC 
FINANCIAL MANAGEMENT (PFM) BY STRENGTHENING CONGRESS' 
POWER OF THE PURSE, INSTITUTING AN INTEGRATED PFM SYSTEM, 
AND INCREASING. BUDGET TRANSPARENCY AND PARTICIPATION, AND 
FOR OTHER PURPOSES. 
EXPLANATORY NOTE 
In 2010, the current administration won a resounding mandate on an anti-
corruption and good govemance platform, jumpstarting a reform movement 
toward instilling transparency and accountability into the business of government. 
Naturally, such reforms focused on what is central to government's social 
contract with the Filipino citizenry (and vice versa)-the national budget. 
However, budget transparency in the Philippines was found to still be 
wanting with the country's ranking in the International Budget Partnership's Open 
Budget Index (OBI) falling by 7 points from 55 (out of 100) in 2010 to 48 in 2012. 
The same report still noted key improvements in budget oversight and citizen 
engagement, which includes the administration's Bottom-Up Budgeting (BUB) 
initiative. 
Controversies then erupted regarding the Priority Development Assistance 
. Fund (PDAF) and the Disbursement Acceleration Program (DAP), highlighting 
even further the urgency and importance of enacting budgetary reforms. 
Many laws 
undergird the country's 
budgetary or public finance 
management (PFM) policies. And lack of clarity opens the opportunity not just for 
sub-par implementation, but also for outright abuse. 
The foregoing measure aims to rectify this situation by clarifying via law-
a veritable first-the country's public finance management policy framework. In 
doing so, the measure details the roles and responsibilities of Congress and the· 
Executive in the budget process and in PFM, in general. 
It also mandates that all branches of government share the same fiscal 
discipline, requiring for instance that every proposed revenue-eroding and 
expenditure measure be accompanied with estimates on its budgetary and 
financial implications for the first six (6) years of initial implementation. 
More importantly, the measure will strengthen mechanisms for citizen's 
access to public financial management information and their participation in the 
budget process through standards on public disclosures and reporting, 
publication of the People's Budget, and the institutionalization of bottom-up 
budgeting. 


Ultimately, the passage of this bill will strengthen government's 
accountability to the people for its use of public funds to further improve the 
ability of govemment to deliver direct, immediate and substantial services to the 
people, especially the poor. 
In view of the foregoing, the immediate passage of this bill is earnestly 
sought. 


16th Congress of the Republic 
Of the Philippines 
Second Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. 
2iii 
Introduced by SENATOR SONNY ANGARA 
"15 
MAY 25 
AlO :07 
H H'EIVEI) BY: 
"AN ACT TO ENFORCE GREATER ACCOUNTABILITY IN PUBLIC FINANCIAL 
MANAGEMENT (PFM) BY STRENGTHENING CONGRESS' POWER OF THE PURSE, 
INSTITUTING AN INTEGRATED PFM SYSTEM, AND INCREASING BUDGET 
TRANSPARENCY AND PARTICIPATION, AND FOR OTHER PURPOSES." 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
PART I 
PRELIMINARY PROVISIONS 
1 
Section 1. ·Short Title. - This Act shall be known as the "Public Financial Accountability Act." 
2 
3 
Section 2. Declaration of Policy and Objectives. - It is hereby declared the policy of the State to 
4 
ensure accountability and integrity in the use of public resources by ensuring transparency, fiscal 
5 
responsibility, results-orientation, efficiency, and effectiveness. This shall be upheld thrDugh the 
6 
establishment of an integrated system of planning, budgeting, management, accounting, repDrting and 
7 
review of public finances. In light of these requirements, the State shall pursue the fDllowing specific 
8 
objectives: 
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(a) To enforce the power of Congress tD authDrize all apprDpriatiDns and hDld government 
11 
accDuntable in the use of public reSDurces, as well as the responsibility of all government 
12 
agencies tD propDse, execute and deliver committed results in the appropriations acts in a 
13 
timely, predictable, and eCDnDmic manner; 
14 
15 
(b) TD prDmDte people's empowerment in the management of public reSDurces by enfDrcing their 
. 16 
right to access information on, and to contribute in the formulatiDn and implementatiDn .of, the 
17 
. financial affairs .of the government; and 
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(c) TD strengthen the integratiDn of planning, budgeting, and performance management and ensure 
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ample safeguards in managing public finances, including through internal cDntrols, accounting,. 
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reporting, and risk management; 
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Section 3. Scope and Coverage. - The provisions of this Act shall apply to the management of 
24 
revenues, expenditures, financing arrangements, and assets and liabilities of national government 
25 
agencies (NGAs), government-owned or -controlled corporations (GOCCs), and local government units 
26 
(LGUs) to the extent provided herein. 
27 
28 . Section 4. Definition of Terms. - The foliDwing terms when used in this Act and the implementing 
29 
rules and regulations shall be understood, as foIlDWS: 
. 
30 
31 
(a) Accounting Standards refer to authoritative statements on hDW transactiDns and other events 
32 
sh.ould be reflected in the accounts and financial statements .of Government Agencies as 
33 
prDmulgated by the Commission on Audit (COA); 
34 
35 
(b) Allotment refers to the authorizatiDn issued by the Department .of Budget and Management 
36 
(DBM) for NGAs, GOCCs, or LGUs to incur .obligations up tD a certain amDunt, fDr a specified 
37 
public purpose, and within a specified period of time, in accordance with the Appropriations 
38 
Law; 
39 
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(c) Appropriations Law refers to the legislative authorization for the utilization of Public Funds for 
2 
specific public purposes covering a specified period of time. This may refer to either a general or 
3 
special appropriations law; 
4 
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(d) Cabinet refers to the Executive Secretary and the Secretaries of the departments under the 
6 
executive branch; 
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(e) Fiscal Year refers to a period of twelve months commencing on January 1 until December 31; 
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(f) Government Agencies collectively refer to NGAs, GOCCs and LGUs; 
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(g) Government-Owned or -Controlled Corporations refer to agencies with corporate powers, 
13 
whether or not organized as a stock or non-stock corporation, vested with functions relating to 
14 
public needs whether governmental or proprietary in nature, and owned by the Government of 
15 
the Republic of the Philippines either wholly or, where applicable as in the case of stock 
16 
corporations, to the extent of at least a majority of its outstanding capital stock. This includes 
17 
Government Financial Institutions, government· corporate instrumentalities and 
related 
18 
corporations; 
19 
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(h) Government Financial Institutions refer to financial institutions in which the GRP directly or 
21 
indirectly owns the majority of the capital stock and which are either: (i) registered with, or 
22 
directly supervised by, the Bangko Sentral ng Pilipinas (BSP); or (ii) authorized to collect or 
23 . 
transact funds or contributions from the public and place them in financial instruments or assets 
24 
suph as deposits, loans, bonds and equity; 
25 
26 
(i) Head of Agency refers to the head of the department or, agency in the case. of NGAs, the Board 
27 
of Directors or Trustees in the case of GOCCs as well as certain agencies which are structured 
28 
as such, and the local chief executive in the case of LGUs; 
29 
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(j) Local Government Units refer to provinces, cities, municipalities, and barangays, as well as 
31 
autonomous regions authorized to be created in the Constitution; 
32 
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(k) National Government Agencies refer to units of the national government, as distinguished 
34 
from GOCCs and LGUs, which include any of the departments, bureaus, offices or 
35 
instrumentalities of the Executive, Judicial and Legislative branches of government, as well as 
36 
the Constitutional Commissions, and the Office of the Ombudsman; 
37 
38 
(I) Proposed National Budget refers to a financial plan to be submitted by the President to 
39 
Congress reflective of national objectives, strategies and programs; 
40 
41 
(m)Public Officials refer to elective and appointive officials and employees, in a permanent or 
42 
temporary capacity, whether in the career or, non-career service, including military and 
43 
uniformed personnel, regardless of the rank, form or amount of compensation; 
44 
45 
(n) Public Funds refer to the monies of all Government Agencies sourced ·from taxes, fees, 
46 
charges, penalties, income, dividends, interest earnings, loan proceeds, grants, pro c e e d s 
47 
fro m the s a leo f ass e t s, and such other receivables of the government that the 
48 . 
Government has a legal right to retain and use and shall not include any money received in 
49 
error; and 
50 
51 
(0) Subsidiary refers to a corporation where at least a majority of the outstanding capital stock is 
52 
owned or controlled, directly or indirectly and through one or more intermediaries, by a GOCC. 
53 
54 
In this Act the singular may be read as the plural and the plural may be read as the singular, as the 
55 
context requires. 
56 
57 
58 
PART II 
59 
ADDITIONAL ROLES AND RESPONSIBILITIES 
60 
61 
Section 5. Congress. - The Congress shall, in addition to its powers under the Constitution and 
62 
existing laws, perform the following: 
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(a) Monitor and review government performance against the requirements of appropriations and 
related laws, and hold Government Agencies accountable for their financial and non-financial 
performance; 
(b) Review reports on planned and actual performance, including the Statement of Fiscal Policy, the 
Medium Term Fiscal Strategy, fiscal reports, annual plans of government agencies, periodic and 
annual reports on government performance and performance of government agencies; and 
(c) Consider the consolidated annual financial statements of government prepared by the Office of 
the Comptroller General (OCG) and the audited government agency reports by the COA. 
Congress shall undertake the foregoing through any of its existing committees, support offices or 
one created for the purpose to strengthen the oversight role of Congress. 
Section 6. President. - The President Shall, in addition to his/her powers under the Constitution and 
existing laws, perform the following: 
(a) Approve the Statement of Fiscal Policy, and the Medium-term Fiscal Strategy for submission to 
Congress; 
(b) Approve the Budget Priorities Framework to identify the priority areas for government spending 
and guide the budget preparation exercise; and, 
, . 
(c) Authorize changes in the functional, operational and organizational structure within and among 
the DBM, Department of Finance (DO F), and National Economic and Development Authority 
(NEDA), as may be necessary, to ensure the effective implementation of this Act. 
Section 7 . . Commission on Audit. - The COA shall, in addition to its powers under the Constitution 
and existing laws, coordinate with the DBM, through the OCG, for the proper enforcement of timely 
accounting and reporting of public finances. 
, 
Section 8. Department of Budget and Management. - The DBM shall, in addition to its mandates 
and functions under existing laws, perform the following: 
(a) Prepare, in coordination with the agencies' concerned, 
and DOF, NEDA and OP in the 
Development Budget Coordination Committee (DBCC), the Statement of Fiscal Policy, the 
Mediumcterm Fiscal Strategy, the Budget Priorities Framework, and the Mid-year and Annual 
Fiscal Reports as required in this Act; 
(b) Monitor and evaluate the financial and non-financial performance of NGAs; 
(c) Evaluate and review the financial and non-financial performance of GOCCs with special laws. 
and charters, in coordination with the DOF and the Governance Commission for GOCCs 
(GCG), and approve the annual corporate operating budgets (COBs) of the GOCCs; 
(d) Monitor and review, together with the Bureau of Local Government Finance (BLGF) under the 
DOF and Department of the Interior and Local Government (DILG), the financial and non-
financial performance of LGUs; 
(e) Assess, together with the BLGF under the DOF and DILG, the PFM systems of LGUs and 
assist them in designing and implementing PFM improvement measures; and 
To ensure the effective formulation and execution of fiscal. policies, the Secretary of Budget and 
Management shall lead the DBCC, with the Secretary of Finance, the Director General of the NEDA 
Secretariat and a representative from the OP as members, and the Governor of the BSP as resource 
person. 
To enhance the management of public finances, there is hereby created an Office of the 
Comptroller General under the supervision and control of the DBM which shall perform the following 
functions: 
311'age 


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i. 
Formulate measures on effective internal controls. for the implementation by Government 
2 
Agencies, to ensure the integrity, accuracy, completeness, and reliability of government financial 
3 
and management systems; 
4 
5 
ii. 
Oversee the implementation of, and Government Agencies' compliance with, accounting and 
6 
auditing rules and regulations promulgated by the COA; 
7 
8 
iii. Oversee and manage the financial reporting of Government Agencies, inciuding (1) to monitor 
9 
the periodic and annual management and financial accounts with regard to accuracy, 
10 
timeliness, completeness, and compliance with this Act, 
standards, rules and 
11 
reg u I a t ion s; and (2) to consolidate the financial reports for submission to the President, 
12 
Congress, and COA; 
13 
14 
iv. Oversee the operationalization of the financial management information system of the 
15 
government; 
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17 
v. Formulate competency-based human resource policies for positions in public financial 
18 
management and coordinate on capacity building requirements on PFM with other agencies; 
19 
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vi. Oversee the implementation of Public Expenditure Framework policies of LGUs; 
21 
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vii. Coordinate with counterpart agency officials to ensure compliance with the foregoing functions; 
23 
and· 
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viii. Perform such other functions as may be necessary to properly implement the provisions under 
26 
this Section. 
27 
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The OCG shall be headed by the Comptroller General who shall be of the same rank as an 
29 
Undersecretary, and with the structure and staff complement as may be approved by the OBM. The 
30 
heads of agency shall designate a Comptroller in their respective offices to oversee the implementation 
31 
of the above-mentioned functions at the agency level in coordination with the Comptroller General. 
32 
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Section 9. Department of Finance. -The OOF shall, in addition to its mandates and functions under 
34 
existing laws, perform the following: 
35 
36 
(a) Monitor and manage fiscal risks to the government, including those from public-private 
37 
partnerships; 
38 
39 
(b) Compile and publish government fiscal statistics in accordance with international standards; and 
40 
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(c) Formulate policies and standards for the acquisition ~nd management of fixed assets by NGAs. 
42 
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The Bureau of the Treasury (BTr) shall, in addition to its mandates and functions under existing 
44 
laws, perform the following: 
45 
46 
i. Manage the Treasury Single Account (TSA) maintained at the BSP or an agent bank, with the 
47 
prior approval of the Secretary of Finance; 
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ii. Put in place arrangements for the execution of duly authorized payments from the TSA, which 
50 
may include the appointment of banks to operate as agents of the National Government with the 
51 
prior approval of the Secretary of Finance; 
. 
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iii. Manage the financial assets and liabilities of the government, including (i) banking 
54 
arrangements for, and bank accounts of, the government; (ii) hedging and other risk 
55 
management activities associated with debt management, cash management and financial 
56 
investment; (iii) appointment of dealers, assets managers and other agents to support debt, 
57 
cash and investment management activities; (iv) maintenance of an accurate record of the stock 
58 
and flow of financial assets and liabilities; and (v) tracking and reporting on fiscal risks related to 
59 
the management of financial assets and liabilities; 
60 
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iv. Issue .instructions on the management and recording of financial assets and liabilities of the 
2 
government; 
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v. Authorize the opening and closing of bank accounts of NGAs; 
5 
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vi. Administer the release of cash requirements covering all types of transfers to LGUs; and 
7 
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vii. Establish and maintain a consolidated registry of fixed assets of the National Government. 
9 
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Section 10. National Economic and Development Authority. - The NEDA shall, in addition to its 
11 
mandates and functions under existing laws, perform the following: 
12 
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(a) Coordinate with the Regional Development Councils (RDCs), on the formulation of regional 
14 
development plans and policies that are consistent with the established national priorities; 
15 
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(b) Coordinate the formulation of an annual and medium-term public investment program consistent 
17 
with the approved Medium-term Fiscal Strategy and in the context of the preparation of the 
18 
National Budget; 
19 
l 
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(c) Set standards for Government Agencies in -proposing, assessing, monitoring and evaluating 
21 
development policies, plans and projects including those financed by grants and concessional 
22 
loans; 
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(d) Assist and support the capacity building of RDCs and LGUs in development planning and 
25 
investment programming; and 
26 
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Section 11. Heads of Government Agencies. - The heads of NGAs, GaCCs and LGUs shall, in 
28 
addition to responsibilities provided under existing laws, be responsible for the following: 
29 
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(a) Keep the DBM and DaF informed of significant changes, issues, and risks that could impact on 
31 
the finances of the government; 
32 
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(b) Participate in the processes t6 develop the Medium-term Fiscal Strategy, the Budget Priorities 
34 
Framework, and the Proposed National Budget as required by the DBM; 
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(c) Manage their respective agencies, including GaCCs, and other resources placed under their 
37 
supervision, in an efficient, effective and economic manner in order to deliver the outputs and 
38 
altain the outcomes set in their respective budgets; 
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(d) Take appropriate measures to ensure that contractual commitments or obligations do not 
41 
exceed the amounts appropriated in their respective budgets; 
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(e) Ensure that their respective agencies settles all contractual obligations or approves payment 
44 
thereon within the time prescribed by law; 
. 45 
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(f) Institute effective and efficient management systems, procedure and practices for assets, 
47 
liabilities, and personnel, including internal controls, risk management, and performance review; 
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(g) Demonstrate that due regard has been taken on the recommendations provided in internal and 
50 
external audit evaluation reports, to the extent authorized in their respective budgets; and 
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(h) Provide accounting and reporting of public finances as required in this Act. 
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PART '" 
56 
FISCAL RESPONSIBILITY 
57 
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Section 12. Fiscal Responsibility Principles. -
The State shall pursue its policy objectives in 
59 
accordance with the following Fiscal Responsibility Principles; 
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(a) Implement fiscal policies and strategies consistent with the achievement of macroeconomic 
2 
stability and inclusive economic development; 
3 
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(b) Manage resources in a fiscally and environmentally sustainable way; 
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(c) Maintain prudent levels of public debt; 
7 
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(d) Maintain an appropriate balance between government revenues and expenditures; and 
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(e) Manage fiscal risks in a prudent manner. 
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Section 13. Statement of Fiscal Policy. - The OBM, in coordination with OOF, NEOA and OP in the 
13 
OBCC, shall prepare, subject to the approval of the President, the Statement of Fiscal Policy which 
14 . 
shall contain measurable medium-term macroeconomic and fiscal objectives and forecasts consistent 
15 
with the Fiscal Responsibility Principles. 
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The President shall submit for information of Congress, the Statement of Fiscal Policy not later 
18 
than ninety (90) days upon commencement of his/her term of office and update the measurable fiscal 
19 
objectives set forth therein three (3) years thereafter .. 
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Section 14. Medium-term Fiscal Strategy. - The OBM, in coordination with the OOF, NEOA, and OP 
22 
in the OBCC, shall prepare, subject to approval of the President, a Medium-term· Fiscal Strategy 
23 
consistent with the approved Statement of Fiscal Policy, to be updated annually. It shall include a 
24 
summary of the fiscal policies for revenue, debt, deficit, expenditure, and fiscal risk management. 
25 
supported by a medium-term fiscal sustainability analysis, consistent with the measurable fiscal 
26 
objectives established in the approved Statement of Fiscal Policy. The IRR of this Act shall detail the 
27 
other specifications for the Medium-Term Fiscal Strategy. 
28 
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The President shall submit for the information of Congress, the Medium-term Fiscal Strategy for the 
30 
following fiscal year not later than March 15 of the current year and shall publish the said report on a 
31 
govemment website not later than seven (7) days after it is submitted to Congress. 
32 
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Section 15. Fiscal Reports. - The OBM, in coordination with the OOF, NEOA, and OP in the OBCC, 
34 
shall produce a Mid-year Fiscal Report (MFR), covering the first half of the fiscal year and an Annual 
35 
Fiscal Report (AFR) on the government's macroeconomic and fiscal performance. 
36 
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The MFR and AFR shall include information on macroeconomic and fiscal outturns for the period 
38 
covered. as compared against forecasts and objectives stated in the Medium-Term Fiscal Strategy; as 
39 
well as reporting on budget execution, at least in the aggregate and by agency level, compared against 
40 
approved appropriations and other spending authorities. The IRR of this Act shall detail the other 
41 
specifications for the contents of the MFR and AFR. 
42 
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The President shall submit the MFR to Congress not later than September 30 of each year while 
44 
the AFR shall b·e submitted together with the Proposed National Budget. Said reports shall be published 
45 
on a government website not later than seven (7) days after they are submitted to Congress. 
61Pagp 


1 
2 
Section 16. Long-term Vision Report. - The NEDA, in coordination with the DOF, DBM and OP in 
3 
the DBCC, shall submit a Long-term Vision Report to the President and Cabinet, and Congress not 
4 
later than October 31 and November 30, respectively. 
Said Report shall assess the long-term. 
5 
sustainability of existing government policies over the next thirty (30) years, taking into account 
6 
demographic, environmental, and other changes. 
7 
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The first Long-term Vision Report shall be submitted to the President and Cabinet, and Congress 
9 
within two (2) years from the effectivity of this Act, to be updated every six (6) years thereafter. 
10 
11 
. The NEDA shall cause the publication of the Long-term Vision Report on a government website not 
12 
later than seven (7) days upon submission to Congress. 
13 
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Section 17. Deviations from Fiscal Objectives. - The government may deviate from the medium-term 
15 
fiscal objectives in the approved Statement of Fiscal Policy on a temporary basis, where such deviation 
16 
is due· to a major natural disaster, unanticipated severe economic shock, or other Significant 
17 
unforeseeable event that cannot be accommodated through accessing the Contingent Fund and/or the 
18 
National Disaster Risk Reduction and Management Fund, as may be applicable or prudent fiscal policy 
19 
adjustments, or the use of other flexibilities provided in this Act. 
20 
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The President shall submit a report to the Congress, stating the reasons for any such deviations, 
22 
the plans and the expected time to address such deviations, as part of the succeeding Medium-term 
. 23 
Fiscal Strategy or its annual update, or in the Mid-year or Annual Fiscal Report, whichever is the next 
24 
report due and within the prescribed period under this Act. 
25 
Section 18. Shared Fiscal Discipline. All proposed revenue eroding and expenditure bills shall 
26 
include a Financial and Budgetary Information Sheet upon filing of the bill containing an estimate of the 
27 
financial and budgetary. implications of said proposal for the initial year of implementation and the next 
28 
five (5) years. Expenditure bills refer to those which will result in a reduction of revenue collections or 
29 
an increase in national government expenditures, including those mandating the creation of recurring 
30 
expenditures. 
31 
Each House of Congress· shall provide guidelines prescribing the form, content of the Financial 
32 
and Budgetary Information Sheet, as well as the appropriate offices from which such information shall 
33 
be acquired, and the implications of non-compliance with said submission. 
. 
34 
35 
. PARTIV 
36 
BUDGET PREPARATION, EXECUTION, AND ADJUSTMENT 
37 
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Section 19. Governing Principles in Budget Preparation. - There is hereby established a set of 
39 
governing principles to be observed by the DBM in the preparation and the presentation to Congress of 
40 
the Proposed National Budget: 
41 
42 
(a) Cash-based estimates shall be adopted in the proposed general and special appropriations bills 
43 
to promote faster and more effective delivery of services; 
44 
45 
(b) The overall expenditure program of the government for a given fiscal year shall be included, 
46 
identifying those requiring approval by Congress and those authorized under existing laws; 
47 
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(c) All sources of funds and authorized uses available to the agency shall be considered in the 
2 
evaluation of agency proposals and determination of agency budget levels, and shall likewise 
3 
be disclosed in the Proposed National Budget and reports; 
4 
5 
(d) Evaluation of agency proposals may include the analysis of a development plan, master plan or 
6 
road map, agency capability as demonstrated by previous years' performance, its contribution to 
7 
projects and activities of other agencies, utilization of funds appropriated or released, and such 
8 
other criteria as may be determined by the DBM; 
9 
10 
(e) All appropriations shall be valid until the end of the fiscal year; 
11 
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(f) Items of appropriations shall be presented in such a way as to identify both the entity 
13 
responsible for the expenditure and the intended results from the use of the appropriation in 
14 
order to evaluate the performance of the 'agency; 
15 
16 
(g) Both. the financial and non-financial performance of agencies shall be presented in the 
17 
Proposed National Budget and the General Appropriations Act to ensure a performance-
18 
informed budget; and 
19 
20 
(h) Items of appropriations shall be reflected by department, agencies, bureaus, and offices, and 
21 
shall be presented for information purposes, by region and province, and eventually, by city or 
22 
municipality. 
23 
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25 
Section 20. 
Planning-Budgeting Linkage - Development strategies identified in the Philippine 
26 
Development Plan shall be a primary consideration in the formulation of the budget priorities 
27 
framework. 
These shall also be the basis for drawing up strategic and prioritized programs and 
28 
projects in the multi-year public investment program, which in turn will be considered in the formulation 
29 
of the annual agency budgets that conform to the annual budget ceilings approved by the President. 
30 
31 
The implementation of programs and projects funded under the annual agency budgets shall be 
32 
monitored to ensure economy, efficiency, and effectiveness in the use of public funds. Monitoring and 
33 
evaluation of these projects shall cover, among others, the planned and actual performance of 
34 
agencies, citing reasons for deviation and/or poor absorptive capacities. The results of the project 
35 
evaluation shall inform the assessment of subsequent plans and budget proposals of agencies. 
36 
37 
38 
Section 21, Budget Priorities Framework. - The DBM, in coordination with the DOF, NEDA and OP 
39 
in the. DBee, shall present to the President and Cabinet, in April of each year, a Budget Priorities 
40 
Framework which shall guide the formulation of the Budget for the following year by containing the 
41 
medium-term fiscal strategy and targets underlying the budget; the priority areas for government 
42 
spending reflected in the PDP, estimated amount and planned allocation of the fiscal space; and other 
43 
requirements laid down in the IRR. 
44 
45 
Section 22. The Budget Preparation Process. - The DBM shall determine the budget preparation 
46 
process and calendar. The budget preparation process shall cover: (i) NGAs; (ii) GOCCs with respect 
47 
to their impact on revenues, expenditures, assets, and liabilities and risks of the government; and (iii) 
48 
LGUs as to their impact on revenues and expenditures of the government. 
49 
50 
Section 23. The Proposed National Budget. -
The President shall submit to Congress, not later than 
51 
thirty (30) days from the fourth Monday of July of every year, the Proposed National Budget, which shall 
52 
be the basis of the general appropriations bill. 
53 
54 
The President shall determine the form and content of the Proposed National Budget which shall 
55 
include, but not limited, to the following: 
56 
57 
(a) President's Budget Message - provides a preview of the Proposed National Budget, explaining 
58 
the principles, objectives and policy framework adopted and the spending priorities for the fiscal 
59 
year; 
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2 
(b) National Expenditure Program (NEP) - includes the strategic objectives, details of the three-
3 
year (3-year) expenditure program, performance information, such as key strategies, outputs 
4 
and outcomes for agencies in relation to their budgets, and staffing summary; 
5 
6 
(c) Budget of Expenditures and Sources of Financing (BESF) - contains the macroeconomic 
7 
parameters; dimensions of three-year (3-year) expenditure program, revenues, financing, and 
8 
outstanding debt; overview of the financial positions of GOCCs, LGUs, and public-private 
9 
partnership projects, as well as th(;l other items listed in the IRR; 
10 
11 
(d) Fiscal Risk Statement - presents a consolidated statement of the fiscal risks that the national 
12 
government faces, including those from the contingent liabilities of Government Agenci~s and 
13 
other items listed in the IRR. 
. 
14 
15 
Congress may not increase the appropriations recommended by the President for the operations of 
16 
government as specified in the Proposed National Budget. 
17 
18 
The President shaUpublish the Proposed National Budget on a Government website on the same 
19 
day as it is presented to Congress. 
20 
21 
Section 24. Lump Sum Appropriations. - To promote the transparent and detailed disclosure of all 
22 
proposed government spending, lump sum appropriations and special purpose funds (SPFs) in the 
23 
Proposed, National Budget shall be limited to: 
(i) the National Disaster Risk Reduction and 
24 
Managemeni"Fund (NDRRMF); (ii) the Contingent Fund (CF); (iii) Statutory Shares of LGUs; and (iv) 
25 
other SPFs not falling under any of the preceding purposes and the details of which could not be 
26 
determined during the budget preparation stage. 
27 
28 
Section 25. National Disaster Risk Reduction and Management Fund. - The NDRRMF shall be 
29 
used for (i) disaster risk reduction or mitigation, prevention and preparedness activities, such as, but not 
30 
limited to, training of personnel, procurement of equipment, and capital expenditures; and (ii) relief, 
31 
recovery, reconstruction and other work or services in connection with natural or human induced 
32 
calamities which may occur during the budget year or those that occurred in the preceding two (2) 
33 
years. 
34 
35 
All releases from the NDRRMF shall be subject to the prior approval of the President, who may take 
36 
into consideration the recommendation of the National Disaster Risk Reduction and Management 
37 
Council and the appropriate agency for local and international disasters and calamities. 
38 
39 
Section 26. Con,tingent Fund. - The Contingent Fund shall cover the funding requirements of new 
40. <;tnd/or urgent and unforeseen projects and activities of NGAs and GOCCs that need to be implemented 
41 
or paid during the year, such as, legal obligation of the government arising from final and executory 
42 
decisions by competent authority, including arbitration awards, mediation settlement, or compromise 
43 
agreements, requirements of newly created offices, or deficiencies in the appropriations for local and 
44 
external travels of the President. 
. 
45 
46 
As a rule, all releases from the Contingent Fund shall be approved by the President. However, 
47 
disbursements due to final and executory decisions promulgated by competent authorities shall only 
48 
require the approval of the DBM. 
49 
50 
The DBM shall inform Congress of all releases from the Contingent Fund in the quarterly and 
51 
annual fiscal reports including information on the date of release, the amount covered, corresponding 
52 
purpose/s and recipient agency. 
53 
54 
Section 27. Statutory Shares of Local Government Units. - The shares of LGUs in the proceeds 
55 
from national taxes and other transfers to LGUs authorized by law shall be released to the LGUs in 
56 
accordance with the provisions on the use, allocation, and release of the funds as may be provided in 
57 
pertinent laws, rules and regulations. 
58 
59 
Section 28. Unprogrammed Appropriations. 
Congress may authorize standby appropriations to 
60 
cover the funding requirements of other priority projects and activities or contingencies, as well as 
61 
provide appropriations cover for foreign-assisted projects (FAPs) not specifically included in the 
62 
programmed component of the Appropriations Law. The Unprogrammed Appropriations shall have the 
911'~gl' 


1 
same level of details as in the programmed component of the Appropriations Law. 
The amount 
2 
authorized under the Unprogrammed Appropriations shall not exceed two percent (2%) of the total 
3 
proposed expenditure in the programmed component of the Appropriations Law. 
4 
5 
The UnprogrClmmed Appropriations shall take effect only when supported by excess collections 
6 
generated in anyone of the particular tax or non-tax revenue source from its corresponding revenue 
7 
collection target in the BESF as certified by the BTr, or when there are new loan agreements for FAPs. 
8 
In no case shall the Unprogrammed Appropriations be activated or released when there is a risk of 
9 
breaching the measurable fiscal objectives for the budget balance (including a deficit) or debt for the 
10 
financial year or future years as provided in the Statement of Fiscal Policy and Medium-term Fiscal 
11 
Strategy or if there is a risk of breaching any of the Fiscal Responsibility Principles. 
12 
13 
Priority projects and activities or contingencies shall pertain to expenditures, the payment of which 
14 
are not covered under the Contingent Fund and could not be delayed until the succeeding budget years 
15 
without harming public interest or arising from the government's legal obligation such, compliance with 
16 
a government guarantee or settlement of final and executory decisions by competent authorities. 
17 
18 
Releases from the. Unprogrammed Appropriations shall be subject to the prior approval of the 
19 
President of the Philippines, except final and executory decisions which shall instead require the 
20 
approval of the DBM. 
21 
22 
The DBM shall inform Congress of all releases from the Unprogrammed Appropriations in the 
23 
quarterly and annual reports including information on the date of release, the amount covered, 
24 
corresponding purpose/s and recipient agency. 
25 
26 
Section 29. Release and Expenditure of Public Funds. - The governm\lnt shall commence releases 
. 27 
of Public Funds covered by an Appropriations Law as soon as such Law comes into force to ensure 
28 
timely and efficient disbursement by the appropriate implementing agencies, subject to pertinent . 
29 
budgeting and auditing rules and regulations. 
. 
30 
31 
Section 30. Early Procurement Activities. - To ensure timely contract implementation and efficient 
32 
delivery of s~rvices, all Government Agencies are authorized to undertake procurement activities from 
33 
pre-procurement conference until post-qualification of bids even prior to the passage of the 
34. 
Appropriations Law, Corporate Operating Budgets (COBs) or Appropriations Ordinance, in accordance 
35 
with IRRs to be issued by DBM. 
36 
37 
Government Agencies may proceed with the awarding of contract upon approval or enactmElnt of 
38 
their respective appropriations or budget authorization document, as the case may be, and based on 
39 
the amount authorized therein. 
40 
41 
Section 31. Re-enacted Budget. - If, by the end of any fiscal year, Congress shall have failed to enact 
42 
the General Appropriations Bill for the ensuing fiscal year, the General Appropriations Law for the 
43 
. preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the said 
44 
General Appropriations Bill is passed by the Congress. 
45 
Consistent with the Fiscal Responsibility Principles, the Re-enacted Budget shall be enforced as 
46 
follows: 
47 
48 
(a) The aggregate level of the Re-enacted Budget shall be limited to the total amount 
49 
appropriated in the preceding year's Appropriations Law, but shall in no case exceed the level of 
50 
the sources of financing under the Budget of Expenditure and Sources of Financing (BESF) of the 
51 
Proposed National Budget; 
52 
53 
(b) All completed programs, projects and activities, as well as program support for GOCCs and 
54 
equity contribution of the national government shall be excluded from the Re-enacted Budget; 
55 
56 
(c) The appropriations for the following shall be limited to the amount authorized under the Re-
57 
enacted Budget, but in no case exceed the amount proposed by the President in the Proposed 
58 
National Budget: 
. 
59 
60 
1. Ongoing programs, projects and activities; 
61 
2. Personnel benefits, including retirement gratuities, pensions, terminal leave pays 
10 Ii' a g t' 


1 
and related expenses; 
2 
3. NDRRMF, Contingent Fund, Statutory Shares of LGUs, and other SPFs; and 
3 
4. Budgetary support to GOCCs but further limited to the amount of subsidy for their 
4 
operational requirements. 
. 
5 
6 
The items and/or amount of appropriations not covered under the Re-enacted Budget as provided 
7 
above shall not be released, disbursed, or utilized for the purpose previously authorized nor be declared 
8 
savings to augment existing items of appropriations in the Re-enacted Budget. 
9 
10 
The DBM shall issue guidelines on the aggregate level of appropriations authorized under the Re-
11 
enacted Budget in accordance with the foregoing, the level of obligations by agencies, supporting 
12 
requirements to determine actual needs, and other pertinent rules in the implementation of the Re-
13 
enacted Budget. 
14 
15 
Upon enactment of the General Appropriations Law, all releases under a Re-enacted Budget 
16 
consistent with this Section shall be deemed to have been implemented pursuant to, and charged 
17 
against, for account recording purposes, the general appropriations law for the current fiscal year. 
18 
19 
Section 32. Special Appropriations Bill. - A Special Appropriations Bill is a legislative proposal to 
20 
provide authorization for expenditures for a specific purpose not included or not covered under the 
21 
annual appropriations laws. It shall, specify the purpose/s for which it is intended and be valid until the 
22 
end of the fiscal year of its enactment. 
23 
24 
A Special Appropriations Bill shall be supported by funds actually available or those which are not 
25' 
included in the fiscal year's sources of financing under the BESF as certified by the National Treasurer, 
26 
or to be raised by a corresponding revenue 'measure proposed therein. The amount to be authorized 
27 
by Congress in a Supplemental Appropriations Bill may be more than that originally proposed for as 
28 
long as the same is supported by any or a combination of the above sources and is consistent with the 
29 
Fiscal Responsibility Principles and the MTFS. 
A Special Appropriations Bill may only be proposed 
30 
after the passage of the General Appropriations Law, except for disaster-related purposes, as well as 
31 
urgent and unforeseen requirements of the government. ' 
32 
33 
Section 33. Multi-year Contracts. - Multi-year contracts (MYCs) shall refer to contracts entered into by 
34 
NGAs and GOCCs where the delivery of goods, civil works, and services will cover more than one (1) 
35 
year. NGAs entering into MYCs shall first secure a Multi-year Obligational Authority (MYOA) from the 
36 
DBM but in no case shall obligate and disburse more than the current year's appropriation for the said 
37 
year's phase of project implementation. GOCCs shall secure prior authority from their respective 
38 
governing boards before entering into MYCs. 
' 
39 
40 
The MYOA issued by the DBM for NGAs, and the amount authorized by the governing board for 
41 
GOCCs' governing board shall be the basis of the ABC under Section 5 of Republic Act No. 9184 for 
42 
MYCs and the certification of availability of funds required prior to contract execution under Section 85 
43 
of Presidential Decree No. 1445. 
44 
45 
Section' 34. Authority to Declare and Use Savings. - The President of the Philippines, the Senate 
46 
President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court; the 
47 
Heads of the Civil Service Commission (CSC), the Commission on Elections (COMELEC), and the 
48 
COA are hereby authorized to declare and use savings in their respective appropriations to augment 
49 
actual deficiencies incurred for the current year in any item of their respective appropriations. 
50 
51 
The foregoing constitutional officers authorized to use savings shall be responsible for ensuring that 
52 
quarterly reports on their respective use of savings shall be submitted to the Senate Committee on 
53 
Finance and the House Committee on Appropriations, copy furnished the DBM. The report shall . 
54 
indicate, among others, the amount of savings generated, the sources and grounds used therefor, and 
55 
the existing item of appropriations augmented. They shall likewise ensure that said reports are posted 
56 
on their respective official websites. 
57 
58 
The DBM shall determine the procedure, as well as the supporting documents needed in the 
59 
declaration and use of savings authorized in this Act. 
60 
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Section ,35. Meaning of Savings. - Savings refer to portion or balances of any programmed items of 
2 
appropriations in the general appropriations law, which have not been released or obligated as a result 
3 
of the following: 
4 
5 
(a) Completion of a program, project or activity at a lower cost than that programmed. For this 
6 
purpose, completion shall refer to the award of contract to the contractor, supplier or consultant. 
7 
Any difference between the approved budget for the contract and the amount of contract award 
8 
may be declared as Savings; 
9 
10 
(b) Decreased cost realized from the implementation of measures resulting in lower input costs or 
11 
efficiencies which enabled agencies to meet and deliver their targets and/or implement or 
12 
complete their projects or activities; 
13 
'14 
(c) Discontinuance or abandonment of a project or activity for causes not attributable to the fault or 
15 
negligence of either the NGA mandated to undertake or authorized to implement said project or 
16 
activity or the procurement agent, at any time during the validity of the appropriations; 
17 
18 
(d) Non-commencement of a program, project or activity for which the appropriations is authorized. 
19 
For this purpose, non-commencement shall refer to the inability of the NGA to obligate an 
20 
allotment on or before June 30 of the current fiscal year due to causes not attributable to the 
21 
fault or negligence of the agency; or 
22 
23 
(e) Unused compensation and related costs as well as pension and retirement benefits. 
24 
25 
Section 36. Rules on Augmentation. - Augmentation is the act of the constitutional officers authorized 
26 
under Section 34 of this Act to use Savings realized in their respective appropriations in order to 
27 
address a deficiency in other items of their respective' appropriations, A deficiency in an item of 
28 
appropriations may result from the following, as determined by the Head of Agency: 
29 
30 
(a) Unforeseen modifications or adjustments in the program, project or activity (PPA); or 
31 
32 
(b) Adjustment in the cost of implementing the PPA due to justified causes. 
33 
34 
' In particular, the authorized constitutional officers shall observe the following when augmenting an 
35 
item of appropriations from Savings: 
36 
37 
(a) There' should be an existing item of appropriations to be augmented, For this purpose, the 
38 
particulars of the expenditures to be funded by augmentation from Savings should be within the 
39 
scope of or may be attributed to the item of 'appropriations to be augmented; and 
40 
41 
(b) In no Gase shall a non-existent allotment class in a PPA be funded by augmentation from 
42 
Savings. 
43 
44 
Section 37. Rules on Realignment. - Realignment is the limited flexibility given to NGAs to modify or 
45 
change the specific details within a PPA that shall not entail any augmentation of the amount 
46 
appropriated for the said PPA during budget execution. Realignment may be undertaken in any of the 
47 
cases specified in the IRR. 
48 
49 
The following are authorized to approve realignments: 
50 
51 
(a) For the Executive branch, the respective Heads of Agencies, except for: (i) realignment, within 
52 
PS for the payment of authorized magna carta benefits; from one allotment class to another 
53 
and, from one operating'unit to another, which shall be subject to approval of the DBM, and (ii) 
54 
realignment of intelligence funds which shall require approval of the President of the 'Philippines; 
55 
56 
(b) For the Senate of the Philippines, all types of realignment shall require approval of the Senate 
57 
President; 
58 
59 
(c) For the House of Representatives, all types of realignment shall require approval of the 
60 
Speaker; 
61 
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1 
(d) For the Judicial branch, the Chief Justice with regard to the Supreme Court and lower courts, 
2 
and the respective Presiding Justices of the Court of Appeals, Court of Tax Appeals and 
3, 
Sandiganbayan, except for realignment of intelligence funds which shall require approval of the 
4 
Chief Justice; and 
5 
6 
(e) For the CSC, COMELEC, and COA, all types of realignment shall require approval of their 
7 
respective Chairpersons. 
8 
9 
The DBM shall promulgate the rules and regulations necessary to ensure the uniform 
10 
implementation among the various branches of government, the proper recording of realignments, and 
11 
the timely submission of reports by all the offices concerned. 
12 
13 
PART V 
14 
FINANCIAL MANAGEMENT 
15 
16 
Section 38, 
General Fund. 
- All monies received by NGAs, whether coming from taxes, fees, 
17 
charges, penalties, income, dividends, interest earnings, loan proceeds, grants, donations, asset sale 
18 
proceeds and such other receivables, shall accrue to the General Fund and be remitted to the National 
19 
Treasury, unless otherwise provided by law or stipulated by covering loan or grant agreements. Monies 
20 
under the General Fund shall be made available to support the requirements of the NG authorized in an 
21 
Appropriations Law. 
22 
23 
A Special Account in the General Fund (SAGF) shall be established by law only under exceptional 
24 
circumstances to record taxes, fees, charges penalties, income, 'dividend, interest earnings, grants, and 
25 
donations collected, earned or received by NGAs for specified purposes. All laws authorizing the 
26 
establishment of SAGFs shall specify the period of use thereof which shall not exceed three (3) years, 
27 
or if no period is specified, .shall be deemed to be until the fulfilment of the purpose for which the SAGF 
28 
was authorized or for three years, whichever comes earlier. All interests earned by SAGFs shall accrue 
29 
to the General Fund. The balance of SAGFs upon their termination shall form part of the General Fund. 
30 
31 
All earmarked revenues with significant inflows, a large portion of which are not or not expected to 
32 
be programmed for disbursement during the year shall be treated as Trust Funds and recorded as trust 
33 
receipts. Proceeds from these Trust Funds shall be recorded only as revenue inflow in the General 
34 . Fund when programmed to be spent for the year. 
35 
36 
The Permanent Committee created under EO No. 292, s. 1989 shall recommend for approval of the 
37 
President the change in the treatment of existing SAGFs that shall be converted into Trust Funds by 
38· 
virtue of the foregoing. The recording of revenue inflows from these SAGFs shall be governed by the 
39 
guidelines to be issued by the Permanent Committee. 
40 
41 
Section 39. Special Funds. - In exceptional cases when an SAGF is not suitable for the operations of 
42 
a fund, Special Funds shall be authorized by law and limited to the following: 
43 
44 
(a) Trust Fund - constituted from identified revenue sources and other receipts by NGAs or public 
45 
officials acting as trustees, agents, or administrators for the fulfillment of obligations or 
46 
accomplishment of specified purposes. Trust Funds shall be depOSited in the Treasury Single 
47 
Account (TSA); 
48 
49 
(b) Revolving Fund - constituted from receipts derived from business-type activities of NGAs to be 
50 
used for the operating requirements of said business-type activities and as such are considered 
51 
self-liquidating. Revolving Funds shall be deposited in the TSA or in an Authorized Government 
52 
Depository Bank (AGDB) upon authority of the National Treasurer; and 
53 
54 
(c) Retained Fund - constituted from taxes, fees, charges, penalties, income, dividends, or interest 
55 
earnings collected, earned or received by NGAs which are expressly authorized by law to be 
56 
retained by NGAs and utilized for specified purposes. Retained Funds shall be deposited in the 
57 . 
TSA or in an AGDB upon authority of the National Treasurer. 
58 
59 
Notwithstanding the provisions of laws to the contrary, Special Funds may only be established after 
60 
evaluation by the Permanent Committee, , as to their proper category and compliance with the 
61 
foregoing conditions. Any interest earned by Special Funds shall accrue to said Funds. 
62 
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Section' 40. Review by the Permanent Committee. - The Permanent Committee shall review all 
2 
existing SAGFs and Special Funds to validate their compliance with the foregoing requirements. Upon 
3 
evaluation, the Permanent Committee shall recommend for approval of the President the modification 
4 
and/or termination of said funds as may be necessary. 
5 
6 
It shall likewise review all SAGFs created upon the passage of this Act and may recommend to extend 
7 
their validity period, but in no case shall the extension exceed three (3) years at anyone time, subject 
8 
to approval of the President. 
9 
10 
The Permanent Committee shall jointly issue guidelines for the establishment, review and evaluation, 
11 
accounting and reporting, and termination of SAGFs and Special Funds. 
12 
13 
Section 41. Escrow Fund. - Escrow Funds are constituted from funds for which the government's 
14 
legal right to use is contingent upon a future event which mayor may not occur. Escrow Funds shall be 
15 
deposited in the TSA or an AGOB upon authority of the National Treasurer, and shall subsequently be 
16 
part of the General Fund upon the occurrence of the future contingent event. Any interest earned by an 
, 17 
Escrow Fund shall accrue to the said Fund. The amounts under escrow, including interest earned shall 
18 
form part of the General Fund upon the occurrence of the future contingent event. 
19 
20 
Section 42. Waiver, Abatement, Refund and Compromise Agreements. - No public official shall 
21 
waive, abate, refund, or enter into a compromise agreement on a tax liability or the payment of fees or 
22 
charges except in accordance with law. All waivers, abatements, refunds or compromise agreements 
23 
made by an NGA shall be properly accounted for and reported. Refund of taxes and other revenues 
24 
shall be treated as a reduction in revenue collections. 
25 
26 
Section 43. Grants . ...: NGAs may accept, with prior coordination with OOF, grants, in cash or in kind, 
27 
from domestic or foreign sources, for purposes relevant to their functions. In the case of grants, in cash 
28 
or in kind, from governments of foreign countries, their agencies and instrumentalities, and 
29 
international' or multilateral institutions or organizations, acceptance thereof shall be subject to the 
30 
prior clearance and' approval by the President or his authorized representative based on the 
31 
recommendation of the Secretary of Finance. 
32 
33 
The provisions of this Section shall not apply to 1) any grant received by LGUs or GOCCs, except 
34 
where the grant is received by them on behalf of the NG , or 2) any grant authorized or covered in 
35 
accordance with existing law. 
36 
37 
Section 44. Treasury Single Account. - The TSA refers to the banking arrangement managed by the 
38 
BTr wherein the government transacts all monies collected" received or paid by NGAs in one bank 
39 
account or a set of linked bank accounts and gets a consolidated view of its cash position on at least, a 
40 
daily basis. 
41 
42 
The TSA shall cover remittances, releases or disbursements from the General Fund, SAGFs, 
43 
Special Funds, and any other fund managed by the BTr, except in any of the following instances: 
44 
45 
(a) When monies under the General Fund are placed under investments; 
46 
47 
(b) When the BTr is required to hold foreign currency accounts; or 
48 
49 
(c) When authorized by the Secretary of Finance. 
50 
51 
The BTr, in coordination with NGAs authorized by law to undertake revenue collection and 
52 
administration, shall make the necessary arrangements with authorized agent banks (AABs) to facilitate 
53 
the collection and transfer of said revenues to the TSA. AABs shall deposit said collections to TSA 
54 
within the period and in the manner prescribed by laws, rules and regulations. 
55 
56 
Section 45.0versight on Government Bank Accounts. - Notwithstanding any provision of law to the 
57 
contrary, the B1/ shall undertake any of the following in case of violation of a provision in this Act and 
58 
guidelines issued on the implementation of the TSA: 
59 
14 I P age 


1 
(a) Transfer balances of NGA bank accounts to the TSA; 
2 
3 
(b) Close any NGA bank account; and/or 
4 
5 
(c) Revoke the authority to open any NGA bank account. 
6 
7 
The NGA or GOCC which has opened a bank account, as well as the bank concerned, shall promptly 
8 
disclose information regarding such account to the BTr. 
9 
10 
Section 46. Treasury Cash Manag.ement. -
The BTr shall issue orders for the conduct of cash 
11 
management including the requirement to provide projections on the timing of future transactions of 
12 
NGAs. If there is a projected cash shortfall, the Btr may request the DBM to temporarily suspend or 
13 
withdraw a portion or the full allotment issued. 
14 
. 15 
Section 47. Investments. -
The BTr may invest portions of the funds held in the TSA for such periods 
16 
as the BTr may deem prudent considering cash management requirements and based on terms and 
17 
conditions as may be set by the IRR of this Act. Investments are authorized to be made in any of the 
18 
following: 
19 
20 
(a) deposit with any highly reputable bank following a selection criteria to be issued by the 
21 
Secretary of Finance in consultation with the Bangko Sentra! ng Pilipinas; 
22 
23 
(b) sovereign-issued securities with an investment grade rating; or 
24 
25 
(c) other fixed income securities with an AAA credit rating issued by at least two (2) reputable 
26 
international credit rating agencies acceptable to the Secretary of Finance. 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
The BTr may appoint a fund manager as an agent of the NG to undertake the investment of the 
funds. 
Interest earned and other income from investments shall accrue to the General Fund, unless 
otherwise provided by law. 
Section 48. Management of National Government Borrowings. -
Borrowings by the NG shall be for any of the following purposes: 
1. Financing budget deficits and liquidity shortfalls; 
2. Refinancing and pre-financing maturing debts; 
3. Obtaining foreign currency on behalf of the Bangko Sentral ng Pilipinas; 
4. On-lending to an approved entity; 
5. Financing all sums of money paid to fulfill guarantees; 
6. Regulating internal monetary conditions should the necessity arise; 
7. Providing financing to remedy the effects of natural calamities; or 
8. Defraying expenditures covered by appropriations. 
Borrowing under this Act should adhere to the Fiscal Responsibility Principles and measurable fiscal 
objectives in the Statement of Fiscal Policy. 
48 
Section 49. Borrowings by Government -Owned or -Control/ed Corporations. -
Before the end of 
49 
each fiscal year, the Head of a GOCe shall prepare a borrowing program for the following fiscal year 
SO 
which shall support the Corporate Operating Budget and for the medium term, both of which shall 
51 
include a full financial plan with the details of the loans, refinancing and repayment that the GOee 
52 .. intends to take. Said borrowing program, including changes thereon, shall be subject to the approval of 
53 
the Head of the NGA overseeing the GOee, and shall be submitted to DOF for information, and shall 
54 
be published in the concerned GOee website. 
55 
56 
57 
58 
59 
60 
Goees shall seek approval of DOF for their borrowing activities as defined in the IRR. 
Nothing in this Section shall be construed as creating a government guarantee on any borrowing, 
loans or refinancing and repayment that the GOee intends to take. 
15 II' age 


1 
Section 50. Local Government Borrowings. -
An LGU may borrow funds from domestic and foreign 
2 
spurces in accordance with the Local Government Code of 1991 or any other applicable law. The 
3 
financial plan' including borrowing program shall be published in the appropriate government website 
4 
within seven (7) days after the borrowing program has been approved. 
5 
6 
Section 51. Debt Reporting. -
The DOF through the BTr shall ensure that the records include 
7 
information on the principal, terms of repayment, amounts drawn, interests and service charges 
8 
accrued, principal and interests paid, and the balance outstanding, and shall make the records 
9 
available in a timely way to the President and Congress when requested and in accordance with the 
10 
reporting requirements in this Act. 
11 
12 
Each LGU and GOCC shall maintain records and provide reports to the DOF on loans as required by 
13 
relevant laws, rules and regulations. 
14 
15 
Section 52~ Guarantees. - Guarantee, indemnity or security shall be provided to an NGA or a GOCC 
16 
as provided by law, and subject to the annual guarantee ceiling prescribed in the General 
17 
Appropriations Law, and upon such terms and conditions as the Secretary of Finance may recommend 
18 
consistent with relevant laws, rules and regulations. The overall level' of guarantee, indemnity or 
19 
security shall adhere to the Fiscal Responsibility Principles laid down in this Act and the fiscal 
20 
objectives in the Statement of Fiscal Policy. 
21 
22 
The DOF shall charge a risk-based fee for any guarantee, indemnity, security, relending or similar 
23 
financial accommodation it may extend to a GOee. 
24 
25 
Section 53. Limitation on the Liability of the National Government For Debts of Other Entities. -
26 
The NG shall not be liable for any implied guarantees asserted by any person, but only for explicit 
27 
guarantees extended in accordance with existing laws, and guarantees in favor of the Government 
28 
Service Insurance System (GSIS), Home Development Mutual Fund (HDMF), Philippine Health 
29 
Insurance Corporation, and the Social Security System (SSS) in their respective charters. 
30 
31 
Section 54. Payments Made for Contingent Liabilities. - Any money paid by the DOF pursuant to 
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any guarantee, indemnity, or security authorized by law and the expenses associated with 'the same 
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shall constitute a debt due the NG from the entity for whose benefit the payment on the guarantee, 
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indemnity, or security was made. 
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Section 55. Information on Contingent Liabilities. - The DOF shall keep a complete and updated 
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registry of all contingent liabilities of the NG, and provide the OCG with a report on contingent liabilities 
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as of the .fiscal year. 
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PART VI 
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ACCOUNTABILITY AND, REPORTING 
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Section 56. Financial Management and Internal Control. -
The Head of Agency shall be 
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responsible and accountable for the financial management bf the agency which shall include meeting 
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performance targets, controlling costs, mitigating adverse risks to agency operations, and ensuring that 
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budgets are managed with integrity and in compliance with applicable laws. Adequate internal controls 
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shall be ensured and an internal audit function shall be maintained. 
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The OCG shall oversee the operation of an integrated internal control framework across 
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Government Agencies. 
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Section 57. NGA Annual Plans and Proposed Budgets. - The Head of each NGA shall produce an 
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Annual Plan which shall have a medium term scope, with details for the following fiscal year, and shall 
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include information on the strategic priorities for the medium-term, consistent with the Philippine 
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Development Plan; performance information; summary proposed budget including financial forecasts 
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assumptions and highlighting significant capital projects; and other information as required in the IRR, 
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as well as the Budget Call and other related orders from the DBM. The Annual Plan shall be submitted 
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to DBM during the budget preparation process consistent with the timetable and other guidelines in the 
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Budget Call. 
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The Head of the NGA shall ensure that the Annual Plan is updated to be consistent with a) the 
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Proposed National Budget, no later than thirty (30) days after the President has submitted the same to 
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Congress, and; b). the General Appropriations Act, no later than thirty (30) days after its enactment. 
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Both revisions of the Annual Plan shall be submitted to Congress and published on a government 
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website within the aforementioned timeframes. 
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The Annual Plan of a Department shall incorporate the Annual Plans of its attached NGAs and GOCCs 
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subject to guidelines prescribed in the IRR. 
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Section 58. NGA Reporting Requirements. -
For greater transparency and accountability, each 
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Head of an NGA shall: 
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(a) Submit monthly and quarterly reports on the agency's financial and non-financial performance to 
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the DBM and. OCG, not later than thirty (30) days after the end of every month and quarter in 
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the format specified by the DBM and shall publish the same on a government website within the 
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same reglementary period; 
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(b) Prepare an Annual Report which shall include year-end financial statements, reporting on non-
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financial performance compared against the Annual Plan, and other information as required in 
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the IRR; submit the said Report to the DBM, OCG, and Congress no later than six (6) months 
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after the end of the fiscal year; and publish the said Report in a government website no later 
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than seven (7) days after its submission to Congress. 
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The monthly, quarterly, and annual reports of a Department shall incorporate the reports of its attached 
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NGAs and GOCCs subject to guidelines prescribed in the IRR. 
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Section 59. Service Agreements. - The Head of an NGA may enter into a service and/or performance 
41 
agreement with another agency for the latter to provide services charged against the budget of said 
42 
principal agency. 
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Section 60. Corporate Operating Budget (COB). - The Board of Directors or Trustees of a GOCC 
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shall prepare and submit a COB to the Head of the NGA overseeing said GOCC, the DBM, and the 
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DOF, not later than ninety (90) days prior to the commencement of the fiscal year, which shall include" 
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the objectives of the GOCCs and its subsidiaries, the activities to be undertaken, performance targets 
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and risks; forecasts of financial statements for the next three (3) years; and other information as may be 
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required in the IRR. 
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The Head of the NGA overseeing said GOCC shall endorse the Board-approved COB to the DBM, 
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for the latter's approval. The Head of a GOCC shall publish the DBM-approved COB of the GOCC on 
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the official website of the Corporation not later than fourteen (14) days after the approval of the COB. 
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Section 61. GOee Reporting Requirements. -
For greater transparency and accountability, each 
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Head of GOCCs shall: 
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(a) Provide quarterly reports on financial and non-financial performance to the DOF, Governance 
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Commission for GOCCs (GCG) and the DBM, no later than thirty (30) days after the end of the 
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quarter, in the format and time specified by the DOF, GCG al)d DBM and shall publish it on their 
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official website within the same period; and 
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(b) Prepare an Annual Report, which shall include year-end financial statements, reporting on non-
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financial performance compared against the COB, and other information as required in the IRR; 
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submit the same to the overseeing NGA, OBM, GCG, OOF and Congress no later than six (6) 
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months after the end of the fiscal year; and publish the said Report in a government website no 
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later than seven (7) days after its submission to Congress. 
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GOCCs with subsidiaries shall reflect in its quarterly and annual reports the aforementioned 
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required information for the whole corporate group, consistent with guidelines prescribed in the IRR. 
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Section 62. Service Agreement for a GOCC. -
Where GOCCs implement government non-
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commercial 
programs, 
such as housing provision, irrigation and electrification, and receive 
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government funding, a service agreement with the NGA overseeing said GOCC shall specify the terms 
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of delivery of goods or services that the GOCC must provide, and the funds that the governrnent will 
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pay. Program funds shall be under the budget of the NGA overseeing said GOCC. 
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Section 63. Local Government Units. -
The Local Chief Executives (LCEs) shall ensure that 
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adequate internal controls and an internal audit function are maintained. 
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The LCEs shall provide financial and non-financial performance information of their respective 
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LGUs to the OCG, OILG, and the BLGF under the OOF, subject to the guidelines to be issued thereon. 
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Section 64. Application of Accounting and Auditing Requirements. - Any expenditure of public 
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money, including government asseis or liabilities incurred by and for the Government regardless of the 
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source of funding, shall be subject to accounting and auditing rules and regulations promulgated by the 
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COA. 
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Section 65. Accounting Standards. - The Comptroller General shall develop guidelines to oversee 
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the implementation of the accounting standards mandated by the COA, for use by all Government 
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Agencies. 
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The Heads of Agencies shall ensure full, accurate and proper records are kept for their respective 
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agencies on financial matters and for perforrnance in the production of goods and services. 
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The OBM, OCG and COA shall ensure that complete, accurate and appropriate records of the' 
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government are kept on both financial and non-financial performances. 
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Section 66. Government Consolidated Reporting -
The OCG shall submit a quarterly report on the 
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consolidated financial performance of the government to the President, which includes information 
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showing performance against the Appropriations Law, not later than sixty (60) days after the end of 
40 
each quarter. This report shaH be published in a government website within seven (7) days after the 
41 
report is submitted to the President. 
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The OCG shall prepare the consolidated annual financial statements, not later than six (6) months 
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after the end of the fiscal year, for submission to the President, Congress and COA. 
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PART VII 
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TRANSPARENCY AND PARTICIPATION 
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Section 67. People's Access to Public Financial Information. - Before the start of each fiscal year, 
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the DBM shall promUlgate a Calendar of Disclosures, and shall publish this on the government website 
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and such calendar shall contain the schedule of release of all budget documents and information 
53 
required by this Act and its IRR. The DBM shall monitor and periodically report to Congress and the 
54 . public on the compliance of agencies with the Calendar of Disclosures and other fiscal transparency 
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requirements under this Act and its IRR. 
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All documents and reports required to be published by this Act and its IRR shall automatically be 
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made available electronically in a government website. Current and historical data on government 
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revenues, expenditures, and borrowings, shall be made available electronically, in open data format, on 
4 
a government website, subject to guidelines in the IRR. 
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Section 68. The People's Budget. -The DBM shall, for every fiscal year, publish citizen-friendly 
7 
summaries of the following, subject to guidelines and other specifications in the IRR: 
8 
(a) the Statement of Fiscal Policy in the year of the President's election and any updates thereafter 
9 
within thirty (30) days from submission to Congress; 
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(b) the Proposed National Budget, to be published in electronic format within thirty (30) days from 
12 
submission to Congress of the Proposed National Budget; 
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(c) the General Appropriations Law, to be published in electronic format in a government website 
15 
within thirty (30)' days from its effectivity; and 
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(d) the Annual Fiscal Report, to be published in electronic format in a government website within 
18 
thirty (30) days from submission to Congress. 
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Section 69. People's PartiCipation in the Budget Process. -
government shall establish and 
21 
i'mplement suitable participatory budget mechanisms to facilitate the open, inclusive, and meaningful 
22 
engagement of citizens throughout the budget process-from budget preparation, to legislation, to 
23 
execution, and to accountability and audit. Such participatory mechanisms may include consultations 
24 
and partnerships with civil society organizations (CSOs), non-government organizations (NGOs), 
25· 
people's organizations (POs), academics and experts, and other individual and organized stakeholders 
26 
throughout the annual budget process. 
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To aid the empowerment of grassroots organizations and communities in the national budget 
29 
process, the DBM, DILG, and other relevant agencies shall facilitate a process wherein CSOs, NGOs, 
30 
POs, community organizations and LGUs can jointly identify local priority poverty reduction and 
31 
development needs which will serve as input to the formulation of the Proposed National Budget. Such 
32 
process shall consider the pursuit of meaningful local devolution and local accountability, as well as the 
33 
strengthening of regional and local development councils' roles in the national budget process. 
34 
35 
Policies and regulations for the establishment of participatory budgeting mechanisms established 
36 
by laws shall be formulated and enforced by: 
37 
38 
i. The DBM, together with other relevant agencies of the executive, when it comes to participation 
39 
in budget preparation, execution, and accountability; 
. 
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41 
ii. The House of Representatives and the Senate, through their relevant committees, when it 
42 
comes to participation in budget legislation; and 
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44 
iii. The COA, when it comes to partiCipation in the conduct of audit. 
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46 
PART VIII 
47 
ENFORCEMENT 
48 
49 
Section 70. Sanctions and Penalties. - Without prejudice to the provisions of other laws, the following 
50 
sanctions and liabilities in case of failure to comply with the reporting and posting requirements under 
51 
this Act, shall be imposed: 
52 
53 
(a) The DBM shall not approve any request for release, of allotments for items of appropriations 
54 
covered in the negative list or realignment nor recommend the use of savings by the President 
55 
until such time as the non-compliant agency has submitted the reportls required under this Act; 
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(b) The COA may disallow any expenditure charged against augmentation using savings, and any 
expenditure due to realignment, which were made within the period succeeding the reporting 
period when the agency failed to comply with the reporting requirements under this Act; 
(c) Failure to report on the income and/or funds retained at the end of a reporting period shall 
render all disbursements against such income or funds in subsequent reporting periods as void, 
and will render the responsible official liable under existing laws; and 
(d) The Congress may motu proprio or upon the request of COA and/or OBM through its appropriate 
oversight committee compel the head of the non-compliant agency, under pain of contempt, to 
produce the required report/s and to explain reasons for failure to submit and disclose said 
report/so 
Without prejudice to the provisions of other laws: 
i. Every obligation, expenditure or payment authorized or incurred in violation of the provisions of 
this Act shall be void and shall render the public official and/or .employee authorizing or making 
such payment and every person in collusion with said official or employee shall jointly and 
severally be held liable to the government for the full amount so paid or received. The public 
official or employee who knowingly incur any obligation or authorizes any expenditure in 
violation of the provisions of this Act or takes part therein shall likewise be removed or 
dismissed from office, after due notice and hearing, even if no criminal charge is instituted 
against him; 
ii. Any public official or employee, holding office or employment in a casual, temporary, holdover, 
permanent or regular capacity, who shall cause the inclusion of fraudulent information in any 
accountability report, shall be penalized with imprisonment not exceeding five (5) years, or a 
fine not exceeding One Million Pesos (P1,000,000.00), or both, without prejudice to' 
disallowances that may be made by COA against expenditures related to such fraudulent 
information, provided, that this fine is reviewed and adjusted periodically to be reasonable; 
iii. A conviction under this Act shall carry with it civil liability, which may either consist of restitution 
for the damage done or forfeiture in favor of the government of any unwarranted benefit derived 
from the act or acts in question, or both, at the discretion of the courts, in addition to possible 
administrative liability; and 
iv. Private individuals who shall conspire with the erring public officials or employees, whether as 
co-principals, accomplices or accessories, in the commission of any violation of this Act shall 
be subject to the same penalties as the public officials or employees and shall be tried jointly 
with them. 
, 
Section 71. Jurisdiction. - Actions under this Act shall be cognizable by the courts, tribunals, bodies, 
agencies or authorities with appropriate jurisdiction under existing laws. 
PART IX 
FINAL PROVISIONS. 
Section 72. Implementing Rules and Regulations. - The OBM in consultation with the OaF, BTr, 
NEOA and COA, in coordination with agencies concerned shall issue the guidelines necessary for the 
proper implementation of this Act. 
Section 73. Transitory Provisions. - The OBM, OaF, BTr, NEOA and COA shall produce and submit 
within thirty (30) days from promulgation of the IRR, a Transitory Plan for information, to the Joint·, 
Congressional Oversight Committee on Public Expenditures to ensure the proper implementation of the 
provisions of this Act, presenting the Sections that will not be implemented on the passing of this Act 
and those requiring compliance with certain conditions or the happening of events before the provisions 
herein may be implemented. 
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Section 74. Repeal. - Any law, presidential decree or issuance, executive order, letter of instruction, 
2 
administrative order, proclamation, charter, rule or regulation and/or parts thereof contrary to or 
3 
inconsistent with the provisions of this Act is hereby repealed, modified or amended accordingly. d 
4 
5 
Section 75. Separability Clause. - If any provision of this Act is declared invalid or unconstitutional, 
6 
the other provisions not affected thereby shall remain valid and subsisting. 
7 
8 
Section 76. Effectivity Clause. - This Act shall take effect fifteen (15) days following its publication in 
9 
the Official Gazette or in two (2) newspapers of general circulation. 
10 
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Approved, 
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