SIXTEENTH CONGRESS ) 2
OF THE REPUBLIC OF THE PHILIPPINES RECEIVED
‘Second Regulac Session ) JUL 2014

HOUSE OF REPRESENTATIVES
© House Bill No. 4770.

Introduced by REP. BEN P. EVARDONE
Long District, Eastern Samar

EXPLANATORY NOTE

In economics, steady economic growth attracts foreign investors while a slowdown turns
them away. The entry of foreign investments, especially FDIs, results in sustainable economic growth
and improved quality of life. Balamban, Cebu is one such story.'

Strong public spending contributes to economic growth. No less than the Supreme Court
recognized this in the recent case of Araullo et. al. vs. Benigno Simeon C. Aquino et. al., GR No.
209287, July 1, 2014, even as it declared unconstitutional certain acts under the Executive policy
named “Disbursement Acceleration Program” (DAP).

Indeed, during the DAP’s implementation, public expenditure growth (14.1%) outpaced
revenue growth (12.9%), so that by the second half of 2012, economic growth was beyond 7%.”

[All these happened primarily on account of the government's accelerated spending policy
while ‘leakages’, mostly in public works projects, were plugged.

‘The Executive had abandoned DAP. This author, however, believes that accelerated spending
must be pursued until the country’s poverty incidence, exacerbated by typhoon Yolanda’, is
significantly reduced. Furthermore, there is need to “catch up” with our neighbors as we enter into the
ASEAN Economic Community integration in 2015.‘ Indeed, the challenge to achieve inclusive
growth through job generation, poverty reduction and global competitiveness remains.” Economist
Cielito Habito, in a column, aptly observed:

“Evidence of significant slowdown in government spending already shows in
the numbers. From January to May, total government revenue grew 12.2% over the
same period last year, and yet total expenditures rose by only 4.7%. The result has
been an unusual budget surplus of P8.5 billion—not at all good news for a
‘government that has a great deal of catching up to do in infrastructure and other vital
public investments. Indeed textbook macroeconomics teaches that deficit spending
is a potent way to stimulate overall economic activity. The ongoing ‘cleansing’ of
government spending -ridding it of dubious transactions that line corrupt pockets,

‘Gerardo Sicat, http:/www.econ.upd.edu.phiperse/?p=3953
* Ci Habito, http://opinion. inquirer net/76369/no-pain-no-gain-leqacy-of-
aquinomics#xzz36wSin0IX

Gerardo Sicat, http://www.econ.upd.edu.phiperse/?p=3928
* Emesto Pernia, Op-ed Commentary, Philippine Daily Inquirer, April 9, 2014, published link in
http:/www.econ.upd.edu.phiperse!?p=3772
icat, http: /www.econ.upd.edu =2768



and now of expenditures not authorized under constitutional limitations—has to
come at the cost of slowing down economic growth.” ©

{In public governance, cost-efficient and timely delivery of public service has been the mantra
for ages. Perhaps, the only laudable resource-saving is one that results from improved and efficient
fiscal administration, Belt-tightening measures to control budget deficit, for example, are frowned
upon as they affect the quality of public service, and at times, cost lives,

‘The author believes that the present legal rules on savings and augmentation should be
reexamined and improved because: First, moneys collected, especially from taxation, are meant to be
spent, not saved. This is self-explanatory, Second, savings from public funds do not earn interest;
Government loans do. Third, slow implementation of programs and projects encourages inefficiency
and thus a great disservice to the taxpaying nation, Fowth, yearend augmentation from savings may
have already ‘killed the hen that laid the golden eggs’.

This bill seeks improvement of certain rules on savings and augmentation embodied in the
current and prior years’ General Appropriations Acts and related laws to allow quarterly
augmentation, realignment or utilization of savings, or at any time once savings is clearly determined
even prior to the end of the fiscal year. Thus:

Section 1 refers to the concept of savings, taken from the General Provision of the General
Appropriations Acts (GAAS) of recent years, Section 2 enumerates the instances when savings may
accrue; Section 2(B [ii]), (C), and (D) are taken from GAAS. Under this provision, savings may arise
before (Sec. 2[A]), during (Sec. 2[B]), and after (Sec. 2(C]) implementation of a program, activity or
project within the current year of appropriation.

Furthermore, this bill clarifies Section 38, Chapter 5, Book VI of EO No. 292, the
Administrative Code of the Philippines, such that whenever the President suspends or stops further
expenditure of funds, as public interest requires, the funds allotted to agencies or departments outside
of the Executive may be declared as savings by the respective Heads of Departments or Agencies, and
used in accordance with this proposed measure. This, in effect, reinforces the fiscal autonomy of such
Departments and Agencies. (Sec. 2, last paragraph).

However, savings which has arisen or declared as such pursuant to Section 2 of this proposed
bill must be used within six (6) months from the time it has arisen or been declared as such.
Otherwise, the same reverts to the National Treasury.

Also, in Section 4 (f), the author adopts by reference Section 49, Chapter 5, Book VI of EO
No. 292, including the purposes enumerated therein, especially those considered fast-moving
programs, activities and projects, as among the priority purposes in the use of savings, for the
observance of the President and other Heads of offices,

Section 5 allows Heads of Departments mentioned in this bill to resort to realignment on a
quarterly basis pursuant to existing laws, and/or for purposes mentioned in Section 4 of this bill.

Section 7 requires the President and other Department Heads to make a quarterly report on the
status, utilization and disposition of their respective quarterly savings.

On this score, the immediate passage of this bill is earnestly sought.

BI g ‘VARDONE

Cielito Habito, http:/opinion.inquit
aquinomics#xzz36wSin0IX

F.net!76369/no-pail

-no-cain-leqacy-of-

z


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SIXTEENTH CONGRESS )
‘OF THE REPUBLIC OF THE PHILIPPINES )
‘Second Regular Session i

HOUSE OF REPRESENTATIVES

House Bill No.__ 477.0.

Introduced by REP. BEN P, EVARDONE
Lone District, Eastern Samar

AN ACT

MANDATING THE PRESIDENT OF THE PHILIPPINES, SENATE PRESIDENT,
SPEAKER OF THE HOUSE OF REPRESENTATIVES, CHIEF JUSTICE OF THE
SUPREME COURT, ALL HEADS OF THE CONSTITUTIONAL COMMISSIONS
ENJOYING FISCAL AUTONOMY, AND OMBUDSMAN TO ACCELERATE
DISBURSEMENT OF FUNDS WITHIN THEIR RESPECTIVE OFFICES,
AUTHORIZING AUGMENTATION FROM SAVINGS AND REALIGNMENT
‘THEREFOR, AND FOR OTHER PURPOSES

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

SECTION 1. CONCEPT OF SAVINGS. -Savings shall refer to available balances or
portions thereof of any programmed appropriation in an Appropriations Act free from any obligation

or encumbrance arising or declared as such at any time within the current year of appropriation in

accordance with this Act. .

SECTION 2, WHEN SAVINGS ARI

activity or project for which appropriation is authorized, savings shall arise when: (i) the law upon

—(A) Prior to implementation of @ program,

which such program, activity, or project is based is repealed or otherwise finally declared
unconstitutional; or (ii) the implementation of such program, activity or project is clearly rendered
useless or unnecessary by natural or man-made events beyond the control of the implementing

agency.

(B) Savings shall arise in the course of implementation of a program, activity or project for

Which appropriation is authorized when: (i) any of the instances mentioned in Section 2 (A) hereof

occur; or (ii) in case of final discontinuance or abandonment of such program, activity or project in

accordance with existing laws, rules and regulations not in conflict with this Act.


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(C) Savings shall arise after completion of a program, activity or project for which
appropriation is authorized, including programs, activities or projects implemented by phase or in a

staggered manner.

(D) Savings shall arise from appropriation balances: (i) arising from unpaid compensation and
related costs pertaining to vacant positions and leaves of absences without pay; or (li) realized from
the implementation of measures resulting in improved systems and efficiencies and thus enabled
agencies to meet and deliver the required or planned targets, programs and services approved in an

appropriations Act or special appropriations provision at a lesser cost.

‘The President of the Philippines, Senate President, Speaker of the House of Representatives,
Chief Justice of the Supreme Court, all Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman shall have the authority to declare savings within their respective
offices: (i) upon the President's resort to Section 38, Chapter 5, Book VI of Executive Order
Numbered 292,
implementation of which is restrained by final order of the court; PROVIDED that, in case of

sofar as the funds affected thereby; (ii) on programs, activities, or projects, the

programs, activities or projects implemented on a daily, weekly or monthly basis, restrained

temporarily or indefinitely by order of the court, savings shall arise during such period until lifted; and

(ii) upon programs, activites or projects which fail to meet their respective quarterly expenditure

target based on criteria set in the general appropriations act for the current yeai

SECTION 3. USE OF SAVIN

service, the President of the Philippines, Senate President, Speaker of the House of Representatives,

— To ensure and accelerate the delivery of public

the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy and the Ombudsman are hereby authorized to use their respective savings on @ quarterly
basis or at any time within six months from the time it arises or declared as such within the current
yur of appropriation; (i) to augment actual deficiencies in any item of theit respective appropriations
in accordance with the provisions of the appropriations act for the current year; and/or (ii) in

accordance with Section 4 hereof.

For purposes of this Act, augmentation implies the existence of a program, activity or project
with an appropriation, which upon implementation or subsequent evaluation of needed resources, is

determined to be deficient.

In no case shall a non-existent program, activity or project be funded by augmentation from

savings or by the use of appropriations otherwise authorized in an Appropriations Act, unless such


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new program, activity or project is implemented pursuant to a new law or policy with authorized

appropriation mandating immediate implementation,

‘The use of savings i

offices, agencies and instrumentalities within the Executive Department

shall be subject to the approval of the President.

SECTION 4. PRIORITY IN THE USE OF SAVINGS.— In the use of savings under

Section 3 hereof, priority shall be given to the utilization of the amounts set aside for:

(a) Payment of compensation, bonus, cash gift, retirement, gratuity, terminal leave benefits,
old-age pension of veterans, and other personnel benefits authorized by laws
(b) Payment of those expenditure items authorized in an agency special provision and in

other sections of the General Provisions of the current General Appropri

jons Act;
(© Payment of obligations incurred in the implementation of new legislative enactments with
authorized appropriations taking effect within the current year;

(@) Payment of obligations incurred to address a publie contingency

ing in the current
years

(©) Covering a deficit in the appropriations for the offices under the respective Heads of
Offices referred to in this Act;

(The implementation of programs, activities or projects pursuant to Section 49 Chapter 5,
Book VI of Executive Order No, 292, especially those deemed fast-moving under existing

laws, rules and regulations.

PROVIDED, that no cross border fund augmentation, realignment, transfer and utilization
shall be allowed; provided further, that any available balance or portion thereof in the General
Appropriations Act, other than the savings referred to herein, which remain unutilized at the end of
the current fiscal year shall revert to the National Treasury; provided finally, that savings shall revert

to the National Treasury when the same remains unuti

ized within six (6) consecutive months from

the time it has arisen or declared as such pursuant to Section 2 hereof.

SECTION 5. REALIGNMENT. — Existing laws, rules and regulations authorizing
realignment of funds may be utilized by the President of the Phill

ines, Senate President, Speaker of

the House of Representatives, Chief Ju

1e of the Supreme Court, all Heads of Constitutional
Commissions enjoying fiscal autonomy, and the Ombudsman insofar as their respective
appropriations are concerned: Provided, realignment may be made for purposes mentioned in Section
4 hereof; provided further, that such laws, rules and regulations are not in conflict with the provisions

of this Act; provided finally, that such realignment may be done on a quarterly basis.


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SECTION 6. IMPLEMENTING RULES AND REGULATIONS. — The President of the
Philippines, Senate President, Speaker of the House of Representatives, Chief Justice of the Supreme
Court, all Heads of Constitutional Commissions, and the Ombudsman shall, within 60 days from the
effectivity of this Act, promulgate the necessary rules and regulations to implement this Act, in
consultation with the Department of Budget and Management, Department of Finance and the

National Treasurer.

SECTION 7. REPORTORIAL REQUIREMENT, — The President of the Philippines,
Senate President, Speaker of the House of Representatives, Chief Justice of the Supreme Court, all
Heads of Constitutional Commissions, and the Ombudsman shall submit a detailed quarterly report to

the Congress of the Philippines, through the Committee on Appropriations of the House of

Representatives and the Senate Finance Committee, on the quarterly status, utilization and disposition

of their respective savings during the current year of appropriation.

SECTION 8. Whenever any provision of this Act is declared unconstitutional, other

provisions not affected thereby shall remain valid,

SE

CTION 9. Alll laws, decrees, executive orders, proclamations, rules and regulations, or

parts thereof inconsistent herewith are hereby repealed or modified accordingly.

SECTION 10. This Act shall take effect fifteen (15) days after its publication in the Official

Gazette or in at least two (2) national newspapers of general circulation whichever comes earlier,

Approved