pice OF FH SLOALTARY
FIFTEENTH CONGRESS OF THE _) 4 eon
REPUBLIC OF THE PHILIPPINES )
First Regular Session )
. a Sonae
SENATE .
Senate Bin'No, 2040 meee Va

Introduced by SENATOR EDGARDO J, ANGARA

EXPLANATORY NOTE

The national interest calls for the institutionalization of budgetary innovations. It
is a declared policy of the State that the budgets of all components of the government
shall be reflective of national objectives, strategies and plans. It must likewise be
supportive of and consistent with the socio-economic development plans of the country.

In pursuit thereof, the budgets of government-owned and controlled corporations
(GOCCs) shall be supportive and consistent with the budgets of all departments, bureaus,
offices and agencies of the national government, brought also by the fact that all
government corporations require national budget support either in the form of direct
outlays, subsidies or guarantees.

Under current practice, however, the budgets of GOCC’s, including those of their
subsidiaries and affiliated companies, are not submitted to Congress as a matter of
course.

Taking to mind the volume and capacity of public resources and activiti
undertaken by government corporations, it is urgent, nay imperative, that a formal
mechanism be institutionalized in the review and analysis of the budgets of these GOCCs
to ensure that the same are consistent with the national development plan and also to
assure transparency in the operations of said corporations.

With this end in view, Section 13 of Presidential Decree No. 1177, otherwise
known as the “Budget Reform Decree of 1977,” is amended to the effect that in addition
to the annual budget of the national government which the President is required to submit
to Congress (the basis for the enactment of a General Appropriations Act), it shall also
include in its budget submission the proposed corporate operating budgets of government

owned or controlled corporations, their subsidiaries and affiliated companies, which
require national government budgetary support.

Further, the bill also requires these GOCC’s to submit to Congress separate and
yearly financial performance reports vis-&-vis their approved budgets, as well as status
reports on obligations they have entered into which are backed by government
guarantees. Approval of this bill, therefore, is eamestly sought.

GaRDO J. ANGARA

Senator

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Lint Tah

FIFTEENTH CONGRESS OF THE —) 4
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

SENATE

Senate Bill No._ 2040 aes, f&

Introduced by SENATOR EDGARDO J. ANGARA

AN ACT
REQUIRING THE SUBMISSION TO CONGRESS OF
CONTROLLED CORPORATIONS, THEIR SUBSIDIARIES AND
AFFILIATES, AMENDING FOR THE PURPOSE, SECTION 13 OF
PRESIDENTIAL DECREE NO. 1177, OTHERWISE KNOWN AS THE
“BUDGETARY REFORM ACT OF 1977”

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

SECTION 1. Section 13 of Presidential Decree No. 1177, otherwise known as
the “Budget Reform Decree of 1977” is hereby amended to read as follows:

SEC. 13. Submission of the Budget. - The President shall, in accordance
with section [sixteen] TWENTY - FIVE (1), Article PIL1 VI of the Constitution,
submit within thirty days from the opening of each regular session of [the
National Assembly] CONGRESS as the basis for the preparation of the General
Appropriations Act, a national government budget of estimated receipts based on

existing and proposed revenue measures, and of estimated expenditures,

‘The President shall include in his / HER budget submission the proposed
expenditure level of the Legislative and Judicial Branches and of Constitutional
bodies, which shall have undergone the same process of evaluation and which
shall have been subject to the same budgetary policies and standards applicable to

agencies in the Executive Branch.

THE PRESIDENT SHALL ALSO SUBMIT TO CONGRESS THE
PROPOSED CORPORATE OPERATING BUDGETS OF ALL
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS,
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES, WHICH REQUIRE,
NATIONAL BUDGETARY SUPPORT JN ACCORDANCE WITH SUCH


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FORMAT, RULES AND REGULATIONS PRESCRIBED BY THE
DEPARWENT OF BUDGET AND MANAGEMENT (DBM).

The President may transmit to [the National Assembly] CONGRESS,
from time to time, such proposed supplemental or deficiency appropriations, as
are, in his judgment, (a) necessary on account of laws enacted after the

transmission of the Budget, or (b) otherwise needed in the public interest.

SEC. 2. Section 22 of the same Decree is likewise amended to read as follows:
“SEC. 22, Budgetary Requirements of Government - Owned or
Controlled Corporations. The internal operating budgets of government -owned
or controlled corporations and of chartered institutions shall be approved by their
respective governing boards in accordance with a budget: calendar and format as
may be approved by the President: Provided, That such budget SHALL BE
SUBMITTED TO CONGRESS AND shall be subject to review and approval as
part of the budget process in cases where national government budgetary support
is needed, in terms of (a) capital or equity inputs, (b) operating contributions to
support specific activities undertaken by the institution as part of its regular
functions, and (e) guarantee of the national government for obligations or
contracts entered into by the corporations; Provided, Further, That the submission
of interim financial statements may be required by the [Commissioner]
SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT”.

SEC. 3. All government -owned or controlled corporations, including their
subsidiaries and affiliates, shall also submit to Congress separate annual reports of
financial performance as compared with their approved budgets, explaining performance
in terms of work and financial results. Reports pertaining to a given fiscal year shall be
submitted on or before June 30 of the following year, through the Department of Budget
and Management (DBM), together with comparative data for the preceding year and the
approved budget for the current year.

SEC. 4. In addition to the reports required to be submitted under the preceding
section, all government - owned or controlled corporations, their subsidiaries and
affiliates, shall periodically report to Congress, through the Department of Finance
(DOF) and the Department of Budget and Management (DBM), on the status of
obligations and contracts which they have entered into and which are backed by

government guarantees.


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SEC, 5. The Department of Budget and Management (DBM) shall promulgate the

necessary rules and regulations for the effective implementation of this Act.

SEC. 6. Separability Clause. - If any provision of this Act or an application
thereof to any person or circumstance is held to be invalid, the other provisions of this
Act, and the application of such provision to other persons or circumstances, shall not be
affected thereby.

SEC. 7. Repealing Clause. All existing laws, orders, rules and regulations or
parts thereof deemed inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 8. Effectivity. This Act shall take effect fifteen (15) days following the hate
of its full publication in the Official Gazette or in at least two (2) newspapers of general

circulation.

Approved,