Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

Date: _* "5

Time: 3244

RECISTRATION UN
BILLS AND INDEX SERVICE

SEVENTEENTH CONGRESS

First Regular Session

HOUSE BILL NO. 343

Introduced by : HON. YEDDA MARIE K. ROMUALDEZ

EXPLANATORY NOTE

The power of the purse is vested in the Congress of the Philippines. Such power has been
explicitly given by no less than the Constitution

Thus when the President for whatever reason refuses to spend funds made available by
Congress in the exercise of its impoundment power, the President is frustrating will of

Congress.

While we recognize the corollary doctrines of separation of powers and checks and
balances, we believe that the Executive and the Legislative Departments should create
safeguards to avoid abuses of power. After all, in a democracy, no department exercise
unbridled and limitless power.

This bill seeks to increase congressional oversight and limit executive influence over
specific appropriations in the General Appropriation Act in recognizance of their defined

powers under our Constitution.

Hence, the approval of this bill is earnestly sought.

Yev| EK, ROMUALDEZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

343

HOUSE BILL NO.

Introduced by: HON. YEDDA MARIE K. ROMUALDEZ

THE BUDGET IMPOUNDMENT CONTROL ACT

Be it enacted by the Senate and the House of Representative in Congress Assembled

Section 1.Title.This Act shall be known and cited as “The Budget Impoundment Control
Act.”

See.2 Declaration of Policy. It is hereby declared the policy of the State to formulate and
implement a National Budget that is an instrument of national development, reflective of national
objectives, strategies and plans. Towards this end, all appropriation except those which shall be
deferred, rescinded, reserved, or otherwise withheld in the General Appropriation Act, shall be
released within the first semester of the year through the issuance of advices of allotment in
accordance with approved work and financial plans, and shall be utilized according to the
purposes provided in the General Appropriation Act, Any deferral, rescission or reservation of
appropriations in the General Appropriation Act shall be in accordance with this Act

Sec. 3.Definition of Terms, For purpose of implementing this Act, the following
definition shall apply

a) Rescission- means cancellation of all of an enacted appropriation, which has not yet been
spent or obligated

b) Reservation- means
expenditures

©) Deferral of releases means with holding or delaying the release of appropriated amounts
provided for project or activities,

imposition of reserves on appropriated amounts for government



d) Impoundment resolution- means a joint resolution of both houses of Congress expressing
its approval of a rescission, reservation or deferral of an appropriation or several
appropriation items as proposed by the President.

e) Advice of allotment- the formal document issued by the Department of Budget and
Management, which contains authorizations, conditions, and amount of obligations that
an agency can incur pursuant to a legislative appropriation

f) Work-and-financial plan- the monthly breakdown of financial requirements and physical
performance targets of an agency

2) Appropriation- unless otherwise described or specified herein, the term appropriations
included in the annual General Appropriations Act.

Sec. 4.Rescission and Reservation of a Budget Appropriation. Whenever the President,
upon the recommendation of the Secretary of the Department of Budget and Management,
determines that all or part of any budget appropriation will not be required to carry out the full
objectives or scope of programs for which it is provided or such budget appropriation should be
rescinded for fiscal policy or other reasons, including the termination of authorized projects or
activities, or whenever all or part of any budget appropriation for the current fiscal year is to be
reserved from obligation for such fiscal year, the President shall transmit to both House of
Congress a special message specifying

a) The amount of budget appropriation which he proposes to be rescinded or which
is to be reserved

b) Any account, department, agency o instrumentality of the government to which
such budget appropriation is available for obligation, and the specific projects or
governmental functions involved

©) ‘The reasons why the budget appropriations should be rescinded or is to be so
reserved

d) The estimated fiscal, circumstances and considerations relating to or bearing upon
the proposed rescission or reservation, and estimated effect of the proposed
rescission or reservation upon the purposes, program, activities and projects for
which such appropriation is provided

Sec. 5 Approval of Rescission or Reservation. Both House of Congress shall act on the
proposed rescission or reservation within sixty (60) calendar days after the receipt of such
proposal from the President by issuing a joint impoundment resolution: Provided, That if the
President’s special message is receiving within a period of less than sixty (60) calendar days
before the end of a regular session, the President's message shall be deemed to have been
submitted on the first day of the succeeding regular session of Congress and the sixty (60) days


referred to in this Section shall commence on the day after such first day. If Congress does not
issue an impoundment resolution within the specified period, the President shall not proceed with
the rescission or reservation procedures. Provided, however , that in the event of a Congressional
approval to rescind, the finds corresponding to the rescinded appropriations shall revert to the
unappropriated surplus of the general fund and shall not be made available for expenditure for
any purpose except as provided for by a subsequent legislative enactment

See. 6 Use of Reserves, When changes in conditions during the year justify the use of the
reserved appropriation which have been imposed under this Act or under General Appropriations
Act, the amount involved shall be allocated back for the use by, and upon the request of the
tion the reserve was originally imposed.

Department, office or agency on whose appropr

See. 7. Deferral of Releases,

(a) Whenever the President, the Secretary of the Department of Budget and
Management, the head of any department, agency or instrumentality of the
Government proposes to defer the release of any appropriation for a specific
purpose, program, activity, or project, the President shall transmit to the House of
Representatives and the Senate specifying

1. The amount of the appropriation proposed to be deferred;

Any account, department, agency or instrumentality of the Government, to which

such appropriation is available for obligation, and the specific projects or

governmental functions involved

‘The period of time during which the appropriation is proposed to be deferred,

‘The reasons for the proposed deferral, including any legal authority invoked by
him to justify the proposed deferral,

The estimated fiscal, economic and budgetary effect of the proposed deferral,

All facts, circumstances and considerations relating to or bearing upon the
proposed deferral, including an analysis of such facts, circumstances and
considerations in terms of their application to any legal authority and specific
elements of legal authority invoked by him to justify such proposed deferral, and
the estimated effect of the proposed deferral upon the objects, purposes, program,
activities and project for which such appropriation is provided.

+

(b) A deferral may not be proposed for any period of time extending beyond the end
of the fiscal year in which the special message proposing the deferral was
transmitted to the House of Representatives and the Senate


See 8. Approval of Release of Deferral. Both House of Congress shall act on the
proposed deferral within sixty(60) calendar days after the receipt of the proposal from the
President: Provided, That if the President's special message is received within a period of less
than sixty (60) calendar days before the end of a regular session, the President's message shall be
deemed to have been submitted on the first day of the succeeding regular session of Congress
and the sixty (60) days referred to in this Section shall commence on the day after such first day.
If Congress does not issue an impoundment resolution within the specified period, the President
shall not proceed with the deferral procedures

Sec. 9.8ubmission of Quarterly Reports. Within thirty (30) days after the end of each
quarter, the Secretary of the Department of Budget and Management shall submit to the
Committee on Appropriation of the House of Representatives and the Committee on Finance of
the Senate, a list of releases made out of reserved and deferred appropriations, and comparative
statements showing the annual general appropriations, the annual program of continuing and
automatic appropriations, and the corresponding releases of allotments and cash allocations for
each department, agency, corporation and fund: Provided, That the releases from each lump-sum
or special purpose fund shall be supported with schedules indicating the specific department!
agencies, corporations or entities which received the fund releases and the purpose of such
releases. The quarterly reports shall also include a cumulative summary of all appropriations
rescinded, deferred or reserved

‘The committee on appropriations of the House of Representatives and the Committee on

Finance of the Senate shall conduct public hearings and call on the heads of the departments,
agencies and corporations for a thorough and detailed quarterly report

See 10. Mode of transmittal of the Special Message of the President. The President shall
transmit to Congress at any time during the budget year but not later than the fifteenth day of
October of the current fiscal year, the special message which may include one or more proposals
for impoundment, reservation, or deferral on one or more appropriation items through the
Committee in Finance of the Senate and the Committee on Appropriation of the House of
Representatives.

See. 11. Penal Provision. Any violation of Sections 2,3,4,5,6,7 and 9 of this Act shall be
punished by a fine not exceeding Five Hundred Thousand Pesos (Php500,000,00) and the
penalty of perpetual special disqualification



Sec. 12. Repealing clause. All laws, decrees, executive orders, letters of instructions,
letters of implementation, rules and regulations or parts thereof inconsistent with the provisions
of this Act are hereby repealed, modified, superseded or amended accordingly

Sec. 13.Effectivity Clause. This Act shall take effect fifteen (150 days after its publication
in the Official Gazette or in at least two (2) newspapers of general circulation

Approved.

YEDDA MARI

Mdm UALDEZ