Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

2871

HOUSE BILL NO.

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

Impoundment refers to the refusal of the President, for whatever reason, to
release funds appropriated by Congress. It is the failure to spend or obligate budget
authority of any type.

While its constitutional conferment is not expressed, the Administrative Code
has given the President specific authority, when in his judgment the public interest
requires and upon due notice to the head of office concerned, to suspend or
otherwise stop further expenditure of funds allotted for any agency

Of recent times however, this presidential prerogative has been misused and
abused, and has emasculated Congress’ authority to check the President's
discretionary power to spend public funds. In effect, the President seems to have a
vast and unbridled control over the national budget.

This bill seeks to increase congressional oversight and to limit executive
influence over specific appropriations in the General Appropriations Act. This
undertaking is urgently needed in the light of the current economic crisis confronting
the whole world, the consequences of which are deemed to severely affect our
country in the coming years.

For these reasons, the approval of this bill is being earnestly requested.

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JOSEPH VICTOR G, EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

2871

HOUSE BILL NO.

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

THE BUDGET IMPOUNDMENT CONTROL ACT

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

SECTION 1. Title. -This is Act shall be known as "The Budget

Impoundment Control Act’

SEC. 2. Declaration of Policy. -It is the policy of the State to formulate
and implement a National Budget that is truly an instrument of national
development. Towards this end, all appropriations, except those which shall be
deferred, rescinded, reserved, or otherwise withheld in the General Appropriations
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 Appropriations
Act. Any deferral, rescission or reservation of appropriations in the General
Appropriations Act shall be in accordance with this Act

SEC. 3. Definition of Terms. -For purposes of this Act:

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

(b) Reservation - means imposition of reserves on appropriated amounts for
government expenditures.

(c) Deferral of releases - means withholding or delaying the release of
appropriated amounts provided for projects or activities.

(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.

(g) Appropriations - unless otherwise described or specified herein, the term
appropriations refers to the 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 that 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 Houses of Congress a special message
specifying:

1. The amount of budget appropriation which he proposes to be rescinded
or which is to be so reserved;

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;

3. The reasons why the budget appropriations should be rescinded or is to
be so reserved;

4. The estimated fiscal, economic and budgetary effect of the proposed
rescission or reservation; and

5. All facts, circumstances and considerations relating to or bearing upon
the proposed rescission or reservation, and the estimated effect of the
proposed rescission or reservation upon the purposes, programs,
activities and projects for which such appropriation is provided.

SEC. 5. Approval of Rescission or Reservation. -Both Houses 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
received within the 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) day period 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 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 provided for by a subsequent legislative
enactment.

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

SEC. 7. Deferral of Releases. -

a. Whenever the President, the Secretary 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 a special message specifying:

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


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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
deferred;

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

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

6. All facts, circumstances and considerations relating to or bearing upon,

the proposed deferral and the decision to effect 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 projects 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.

SEC. 8. Approval of Release Deferral. -Both Houses 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) day period 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. Submission 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 Appropriations 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 departments/agencies, corporations or entities which
received the fund releases and the purposes of such releases. The quarterly
reports shall also include a cumulative summary of all appropriations rescinded,
deferred or reserved.

SEC. 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 budget 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 on Finance of
the Senate and the Committee on Appropriations of the House of
Representatives. |


SEC. 11. Penal Provision. -Any violation of the Sections 2,4,5,6,7,8, and 9 of
this Act shall be punished by of fine not exceeding Five Hundred Thousand Pesos
(P500,000.00) 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 (15) days after
its complete publication in the Official Gazette or in at least two (2) national
newspapers of generai circulation, whichever comes earlier.

Approved,