HOUSE OF REPRESENTA|
Quezon City

SEVENTEENTH CONG!
First Regular Sessio REGISTRATION UNIT

2868 ais ano INDEX SERVICE

House Bill No.

Introduced by AKBAYAN Representative Tomasito S. Villarin

EXPLANATORY NOTE

The annual appropriations law, having gone through review and approval of
Congress, should be followed religiously. But, and however meticulous the
process of passing the General Appropriations Act may be, augmentation of
certain budgetary allocation may be necessary. Augmentation finds support
from Section 25 (5) of the 1987 Philippine Constitution which provides:

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

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

‘This proposed Savings and Augmentation Act of 2016 is a re-fling of House
Bill No. 2256, introduced by Akbayan representatives in the 16t Congress.
It seeks to regulate the proper use of savings and to set the limits in the
augmentation of budget specified in the General Appropriations Act.

It highlights that the use of “savings,” defined in this bill, shall be subject to
the limits set by existing laws as well as by the General Appropriations Act.
It underscores review and approval by Congress, and the possibility of
disallowing the use of “savings” if it is shown that the use will not conform
with existing guidelines, conditions and limits. This bill also further defines
unexpended amounts that shall revert back to the General Fund at the end
of the fiscal year.


The objective of this proposed legislation is to promote government efficiency
and effectiveness in the use and generation of revenue, which will surely
lead to the attainment of the goals of national development.

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

CS
a

TOMASITO S. VILLARIN


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

2868

House Bill No. _- - -

Introduced by AKBAYAN Representative Tomasito S. Villarin

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

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

SECTION 1. Title—This Act shall be known as the “Savings and
Augmentation Act of 2016.”

SECTION 2. Declaration of Policy —It is the policy of the State to
ensure that the Executive Branch of the Philippine Government
implements the budget as specified in the General Appropriations Act
duly enacted by Congress pursuant to its constitutional authority to
prescribe all government appropriations.

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

“Section 2. Definition of Terms.—When used in
this Book:

1. “Appropriation” refers to. an
authorization made by law or other legislative
enactment, directing payment out of
government funds unders specified conditions
or for specified purposes.

2. “Allotment” refers to an authorization
issued by the Department of Budget and

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Management to an agency, which allows it to
incur obligation for specified amounts
contained in a legislative appropriation.

3. “Augment’_is the power _to transfer
savings from one appropriation to cover
deficits_in_another_as_exercised_by the
President, Senate President, Speaker of the
House, Chief Justice, and Heads of the
Constitutional Commissions within __their
respective branches and agencies as provided
in this Book.

4. “Deficit” means an insufficiency in the
appropriated amount for the completion of a
particular program, project or activity or the
fulfillment _of current operating expenditures
and capital outlays not arising from causes
such as overpricing or other factors which
could have been reasonably foreseen in order
to complete the program, project or activity or
fulfill_current operating expenditures and
capital outlays within the given appropriation
specified in the General Appropriations Act for
said_program, project _or activity, current
operating expenditures and capital outlays.

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

6. “Current operating expenditures” refers
to appropriations for the purchase of goods
and services for current consumption or for
benefits expected to terminate within the
fiscal year.

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


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

9. “Deferra?’ means withholding or
delaying the release of appropriated amounts
provided for projects or activities.

10. “Expected results” means service,
product, or benefit that will accrue to the
public, estimated in terms of performance
measures or targets.

11. “Fiscal year’ refers to the period
beginning with the first day of January and
ending with the thirty-first day of December of
each calendar year.

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

13. “Department and — agency” and
“department or agency” include __ all
departments, bureaus, offices, boards,
commissions, courts, tribunals, councils,
authorities, administrations, _centers,
institutes, state colleges and universities, and
all other establishments and instrumentalities
of the National Government as defined in the
preceding paragraph.

14. “Obligation” refers to an amount
committed to be paid by the Government for
any lawful act made by an authorized officer
for and in behalf of the Government.

15. “Program” refers to the functions and
activities necessary for the performance of a
major purpose for which a Government
agency is established.

16. “Project”. means a component of a
program covering a homogenous group of
activities that results in the accomplishment
of an identifiable output.

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17. “Savings” means _any _unexpended
portion or amount of money for _an
appropriation as _specified_in_the General
Appropriations _Act__resulting from the
completion of a program, project or activity or
fulfillment _of the purpose for which the
appropriation was specified at_a cost below
the amount _appropriated_therefor_due_to
lower-than expected expenditures. This shall
not refer to _unexpended_ amounts resulting
from the President’s exercise of the power to
impound under Section 38, Chapter 5 of Book
Vi._In_ addition, this shall _not_refer_to
unexpended_ items in a re-enacted budget
under Section _25(7), Article _VI_of the
Philippine Constitution.”

SECTION 4. Section 28 of Chapter 5, Book VI of Executive Order No.
292 otherwise known as the “Administrative Code of 1987” is hereby
amended to read as follows:

“Section 28. Reversion of unexpended balances
of appropriations, continuing appropriations.—
Unexpended balances of appropriations
authorized in the General Appropriations Act
shall revert to the unappropriated surplus of
the General Fund at the end of the fiscal year
and shall thereafter be available for
expenditure except by subsequent legislative
enactment: Provided, That appropriations for
capital outlays shall remain valid until fully
spent or reverted: Provided, further, That
continuing appropriations for current
operating expenditures may be specifically
recommended and approved as such in
support of projects whose effective
implementation calls for_~—smulti-year
expenditure commitments: Provided, finally,
That the President may authorize the use of
savings realized by an agency during a given
year to meet non-recurring expenditures in a
subsequent year under guidelines, conditions
and limits to be prescribed by Congress in the
General Appropriations Act and subject to its
review and disallowances if the use of savings
does not conform with said prescribed
guidelines, conditions and limits.



“Appropriations for capital outlay shall in no
case_be realigned for personal services and
current operating expenditures. The balances
of continuing appropriations shall be reviewed
as part of the annual budget preparation
process and the President may approve upon
recommendation of the Secretary, the
reversion of funds no longer needed in
connection with the activities funded by said
continuing appropriations.”

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

“Section 39. Authority to use savings in
appropriations to cover deficits—Except as
otherwise provided in the General
Appropriations Act, any savings in the regular
appropriations authorized in the General
Appropriations Act for programs and projects
of any department, officer or agency, may,
with the approval of the President, be used to
cover a deficit in any other item of the regular
appropriations: Provided, That the creation of
new positions or increase of salaries shall not
be allowed to be funded from budgetary
savings expect when specifically authorized
by law: Provided, further, That whenever
authorized positions are transferred from one
program or project to another within the
same department, office or agency, the
corresponding amounts appropriated for
personal services are also deemed
transferred, without, however, increasing the
total outlay for personal services of the
department, office or agency concerned.

Under_no_ circumstances _shall_ savings be
used for programs, projects and activities, or
any other purpose not appropriated for in the
General Appropriations Act pursuant __to
Section 29(1), Article VI of the Philippine
Constitution. Any act_to the contrary shall
constitute misuse of Government funds and
illegal expenditures as provided in Sections
80_and_43 of this Book, including use of
savings on __unprogrammed expenditures
beyond the limits prescribed in the General

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Appropriations Act. In addition, any use of
expenditures subject to limitations provided
in_the General Appropriations Act shall be
reviewed and may be disallowed by Congress
for being made in violation of said limitations.

In_addition, unexpended amounts _of_an

lump-sum _ appropriation _made_by Congress
shall under no circumstances be considered
and _used as savings but shall automatically
revert back to the General Fund at the end of
the fiscal year pursuant to Section 28 of this
Book. Any act to the contrary shall likewise
be_considered_misuse of government funds
and_illegal_expenditures_as provided in
Sections 80 and 43 of this Book.”

SECTION 6. Section 49 of Chapter 5, Book VI of Executive Order No.
292 otherwise known as the “Administrative Code of 1987” is hereby
amended to read as follows:

“Section 49. Authority to use savings for
certain purposes—Savings in the
appropriations provided in the General
Appropriations Act may be used for the
settlement of the following obligations
incurred during a current fiscal year or
previous fiscal years as may be approved by
the President in accordance with specific
guideliens, conditions and limitations that
shall be prescribed inthe General
Appropriations Act.”

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

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

SECTION 9. Effectivity Clause_—This Act shall take effect fifteen (15)
days after its complete publication in the Official Gazette or in at least
two (2) national newspapers of general circulation, whichever comes
eatlier.


Approved,