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FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
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Second Regular Session 
) 
S E N A T E  
INTRODUCED BY THE HONORABLE MAR ROXAS 
EXPLANATORY NOTE 
Enshrined in the 1987 Constitution is Congress’ power over the purse which endows 
Congress with the exclusive authority to formulate a national budget that is an instrument of 
national development. At the same time, being the executor of the national budget, the 
President is provided by the Constitution with a line-item veto power that empowers the 
President to delete any appropriation that the President may deem unnecessary. If Congress 
disagrees with the judgment of the President, Congress may choose to override the veto. This 
Executive-Legislative tension, with regard to the national budget, as embodied in the 
Constitution, aims to create an effective check-and-balance on government spending to 
ensure that the people’s money is spent responsibly and effectively. 
However, this check-and-balance mechanism embodied in the 1987 Constitution was 
undermined by Revised Administrative Code of 1987 when it granted the President the 
authority to suspend or stop further expenditure of any expenditure authorized in the 
General Appropriations Act without giving Congress the corresponding power to overturn 
the President’s decision to suspend or stop the expenditure. This authority allowed the 
President to control government expenditures to prevent unmanageable deficits but it also 
increased the discretionary power of the President in releasing funds that have already been 
authorized by Congress. 
Thus, for the purpose of restoring Congress’ power over the purse, while maintaining 
the national government’s ability to manage expenditures to prevent a possible fiscal crisis, 
this bill, limits the discretionary power of the President in releasing funds by requiring 
Congressional participation in the suspension or cancellation of the expenditure of 
appropriated funds. 
Furthermore, to increase the transparency in the release o f  appropriated funds, this 
bill compels the Secretary of Budget and Management to submit to Congress a quarterly 
report containing a summary of releases of allotments and cash allocations for each 
department, agency, corporation and fund. 
In view of the foregoing, the immediate enactment of this measure is earnestly 
sought. 


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FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
Second Regular Session 
1 
9 
JAN 20 PZ 32 
S E N A T E  
INTRODUCED BY THE HONORABLE MAR R O U S  
AN ACT 
REGULATING THE POWER OF THE PRESIDENT TO RESCIND OR 
RESERVE EXPENDITURE OF APPROPRIATIONS AUTHORIZED BY 
CONGRESS, AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House ofRepresentatives in Congress assembled: 
SECTION 1. Etle. - This Act shall be known as the "Budget Impoundment Contsol 
and Regulation Act of 2009. " 
SECTION 2. Declaration of Policy. - It is 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 appropriations, except those, 
which shall be explicitly rescinded, reserved, or provided for otherwise in the General 
Appropriations Act, shall be automatically released through the issuance of advices of 
allotment in accordance with the quarterly allotment period or any other period prescribed 
by the Secretary of Budget and Management, and shall be utilized according to the 
corresponding purposes provided for in the General Appropriations Act. Any rescission or 
reservation of appropriations in the General Appropriations Act shall be made in accordance 
with this Act. 
SECTION 3. Definition of Terms. - For purposes of this Act: 
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(a) Appropriation - refers to an authorization made by law or other legislative 
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enactment, directing payment out of government funds under specified 
conditions or for specified purposes. 
(b) Allotment - refers to an authorization issued by the Department of Budget and 
Management to an agency, which allows it to incur obligation for specified 
amounts contained in a legislative appropriation. 
(c) Rescission - means cancellation of all or parts of an enacted appropriation which 
has not yet been spent or obligated 
(d) Reservation - means imposition of reserves on an appropriated amount for 
government expenditures thus withholding or delaying the release of 
appropriated amounts provided for projects or activities. 
(e) Impoundment resolution - means a joint resolution of both Houses of Congress 
expressing either approval or disapproval of a rescission or reservation of an 
appropriation or several appropriation items as proposed by the President. 
SECTION 4. Rescission of Appropriations. - 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 that such budget appropriation 
should be rescinded for fiscal policy or other reasons, including the termination of 
authorized projects or activities, the President shall transmit to both Houses of Congress a 
special message specifying all of the following: 
(1) the amount of budget appropriation which he proposes to be rescinded; 
(2) any account, department, agency or instrumentality of the government to which 
such budget appropriation is available for obligation, and the specific projects or 
governmental functions involved; 
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(3) the reasons why the budget appropriation should be rescinded; 
(4) the estimated fiscal, economic and budgetary effect of the proposed rescission; and 
(5) all facts, circumstances and considerations relating to or bearing upon the 
proposed rescission, and the estimated effect of the propose rescission upon the 
purposes, programs, activities and projects for which such appropriation is 
provided. 
Provided, that no personal services appropriations used for permanent officials and employees 
shall be subject to rescission. Providedfieher, that the President shall transmit to Congress at 
any time during the calendar year but not later than the thirtieth (30th) day of September the 
special message referred to above, which may include one or more proposals for rescission on 
one or more appropriation items, through the Committee on Finance of the Senate and the 
Committee on Appropriations of the House of Representatives. 
SECTION 5. Approval of Rescission. - Both Houses of Congress shall act on the 
proposed rescission within thirty (30) calendar days after the receipt of such proposal from 
the President by issuing a joint impoundment resolution, either approving or disapproving 
the same. If request for rescission is denied, the amount requested to be rescinded shall be 
immediately released. IJi-ovided, that if the President's special message is received within a 
period of less than thirty (30) 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 thirty (30) day period referred to in this 
Section shall commence on the day after such first day. Provided firther, that if Congress 
does not issue an impoundment resolution within the specified period, the proposed 
rescission shall be deemed disapproved and the amount proposed to be rescinded shall be 
immediately released. And provided furthermore, that by the first (1") day of October all 
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proposals for rescission that have not been acted upon by Congress shall be deemed 
disapproved and the amount proposed to be rescinded shall be immediately released. 
SECTION 6. Use ofRescindedAppropnkrions. 
- Funds 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 may be provided for in a 
subsequent appropriation law enacted by Congress. 
SECTION 7. Reservation ofApprpnktions. - Whenever the President, the Secretary 
of Budget and Management, the head of any department, agency or instrumentality of the 
Government proposes to reserve from obligation all or part of any appropriation for a specific 
purpose, program, activity, or project, the President shall transmit to the House of 
Representatives and the Senate a special message specifying all of the following: 
(1) the amount of the appropriation proposed to be reserved; 
(2) 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; 
(3) the period of time during which the appropriation is proposed to be reserved, 
provided that any proposals for reservation must not extend beyond the end of the 
fiscal year; 
(4) the reasons for the proposed reservation; 
(5) the estimated fiscal, economic and budgetary effect of the proposed reservation; 
(6) all facts, circumstances and considerations relating to or bearing upon the 
proposed reservation, and the estimated effect of the propose reservation upon the 
purposes, programs, activities and projects for which such appropriation is 
provided. 
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Provided, that no personal services appropriations used for permanent officials and employees 
shall be subject to reservation. Provided firrhei; that the President shall transmit to Congress 
at any time during the calendar year but not later than the thirtieth (30'") day of September 
the special message referred to above, which may include one or more proposals for 
reservation on one or more appropriation items, through the Committee on Finance of the 
Senate and the Committee on Appropriations of the House of Representatives. 
SECTION 8. Approval of Reservation. - Both Houses of Congress shall act on the 
proposed reservation within thirty (30) calendar days after the receipt of the proposal from 
the President. If request for reservation is denied, amount proposed to be reserved shall be 
immediately released. Provided, that if the President's special message is received within a 
period of less than thirty (30) 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 thirty (30) day period referred to in this 
Section shall commence on the day after such first day. Provided firther, that if Congress 
does not issue an impoundment resolution within the specified period, the President shall 
proceed with the reservation. And provided furthermore, that by the first (I") day of 
October all proposals for reservation, that have not been acted upon by Congress shall be 
deemed disapproved and the amount proposed to be reserved shall be immediately released. 
SECTION 9. Submission of Quarrerl'Reporfs. - Within thirty (30) days after the end 
of each quarter, the Secretary of Budget and Management shall submit to the Committee on 
Appropriations of the House, of Representatives and the Committee on Finance of the 
Senate, 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. The 
quarterly reports shall also include a cumulative summary of all appropriations rescinded, 
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and reserved, including, where applicable, the corresponding impoundment resolutioids 
approving such rescissions, and reservations. Provided, that the releases from each lump-sum 
or special-purpose fund shall be supported with schedules indicating the specific 
departments, agencies, corporations, or entities which received the fund releases and the 
purposes of such releases. 
SECTION 10. Penal Provision. - Any violation of this Act shall be punished by 
imprisonment from three (3) years to nine (9) years, a fine not less than one hundred fifty 
thousand pesos (Pl50,OOO.OO) but not exceeding three hundred thousand pesos 
(P300,000.00), and the penalty of temporary special disqualification. 
SECTION 11. Administrative Liabilities. - Any violation of this Act shall cause the 
suspension of payment of the violators’ salaries including retirement and separation benefits 
until they have complied with the requirements of this Act and such compliance is upheld 
by final judgment of the courts. No appropriation authorized in the General Appropriations 
Act shall be made available to pay the salary of any official or employee who violates the 
provisions of this Act. Any rescission or reservation in violation of the procedures for 
Congressional authorization stipulated in this Act shall be illegal and every official or 
employee authorizing or making such rescission or reservation, or taking part therein, shall 
be held liable to the agencies whose appropriation were rescinded or reserved for the full 
amount rescinded or reserved. In addition, the amount of the appropriation illegally 
rescinded or reserved shall be subtracted from the total appropriations of the Office of the 
President, the Department of Budget and Management, and the Contingent Fund 
administered by the Office of the President. If the allotments released against the 
appropriations under these three accounts are greater than the balances of the appropriations 
for these three accounts after subtracting the illegally rescinded and reserved amounts, then 
the President and the Secretary of Budget and Management shall be made personally liable 
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to the Government for the difference between the allotments already released and the 
adjusted appropriations. 
SECTION 12. 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 
portions. 
SECTION 13. 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. 
SECTION 14. Effectiw’ty 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 earlier. 
Approved, 
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