Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House Bill No.__2257

Introduced by AKBAYAN Representatives Ibarra Gutierrez III and Walden Bello

EXPLANATORY NOTE

Every year, the Government goes through a meticulous process of setting its goals and
priorities, identifying necessary programs and projects, and putting the required
budgetary allocations for the programs and projects it has identified. In the end, the
preparation of the Government's annual appropriations ensures that its work plan
promotes efficiency, generates more revenue for the government and responds

effectively to national development requirements.

All government instrumentalities depend on the allocations made on the approved
General Appropriations Act to realize set objectives, programs and projects. Each
government instrumentality’s efficiency lies in the regular availability of budgetary

support to oil its machinery and accomplish its mandate.

‘The Local Government Code provided the impetus for local governments to chart their
‘own destiny by allowing each local government co identify significant and necessary
development initiatives for its respective localities. This is important for the progress and

development of its citizenry.

In most cases, however, due to the uncertainty in the releases of allotment, government
instumentalities and local governments fll prey to the whimsical exercise of deferment,

rescission or even reversion of appropsiations. Such frustrates expectations of their


respective constituencies, leaving them with false promises of implementing

development programs that may never be realized,

An updared and revised version of House Bill No. 2925 filed by Representatives Walden

Bello and Kaka Bag-ao during the Fifteenth Congress, the Impoundment Control and
Regulation Act of 2013 ensures that proper limits and procedures are put in place in the

exercise of the President’s authority to defer, rescind or reserve expenditures that havi

already been approved by Congress through the General Appropriations Act,
Tn addition, this proposed law safeguards the authorigy of the President so that
succumbing to pressures and other influences that negate the very reason for the

enactment of the General Approptiations Act is avoided
In the end, the objective of this proposed legishuion is 10 make both the national
government and the local government units to work better for the citizenry towards

national development.

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

rartd Gulidye,

bf

Walden


16

public of the Philippine:
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

teenth Congress
First Regular Session

House Bill No. 22 57

Introduced by AKBAYAN Representatives Ibarra Gutierrez HII and Walden Bello

AN ACT REGULATING THE POWER OF THE PRESIDENT’ 'I'0 DEFER,
RESCIND, OR RESERVE EXPENDITURE OF APPROPRIATIONS
AUTHORIZED BY CONGRESS

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

SECTION 1. Title —This Act shall be known as the “Ioypoundment Control and Regulation

Aat of 2013.”

SECTION 2. Declaration of Policy —tr is the policy of the State to formulate and
implement National Budget that is anchored on a meticulous assessment of the

Government’s budgetary requirements based on clearly-defined national priorities, that

promotes efficiency and cesolve in the Government’s revenue generation efforts, and is

truly responsive to the needs of national development. Towards this end, all

appropriations, except those which shall be expressly detested, rescinded, reserved, or

provided for otherwise, in che General Appropriations Act, shall be automatically

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 corresponding purposes provided for in the General Appropriations Act. Any other

deferral, rescission, of reservation of appropsiations in the General Appropriations Act

shall ba made in accordance with this Act.


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3
4

20
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28
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30
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to read as follows:

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

L

law or other legisluive enactment, directing payment out

tpprepriation” refers to an authorization made by

of Government funds under specified conditions or for
specified purposes.

2. “Allotment” refers co an authorization issued by the
Department of Budget and Management to an agency,
which it allows the agency to incur obligation for specified

amounts contained in a legislative appropriation,

3 “Advice of allotment’ refers to the formal document

a ‘i ‘

4 “Budge? refers to a financial plan required to be
prepared pursuant to Section 16(1), Article VIII of the
Philippine Constiration, reflective of national objecti

strategies and programs.

5 “Current operating expenditures” — refers «0
appropriations for the purchase of goods and services for
cucrent consumption or for benefits expected to terminate

within the fiscal yeae.

6 “Capital outias” ox “capital expenditimes? refers to an
appropriation for the purchase of goods and services, the

SECTION 3. Definition of Terms—Section 2, Chapter 1, Book VI of Executive
Order No. 292 otherwise known as the “Administrative Code of 1987,” is hereby amended


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

“Continuing appropriation” refers to an appropriation

vailable to support obligations for a specified puzpose or

project, even when these obligations are incurred beyond

the budget y

ae,

8 “Defirruf?” means withholding or delaying the
release of appropriated amounts provided for projects or

activities,

“Bypecied remit? means service, produet, or benefit
thar will accrue to the public, estimated in terms of

performance measurers or targets,

10,

the first day of January and ending with the chirty-first day

zal year” refers 0 the period b

ning with

of December of each calendar year.

LL The —“Govwrmen?? — means the National
Government, including the Executive, the Legislative and
the Judicial branches, and the Constitutional

Commissions

12 “Department and agency? and “dypartment or agency”
boards,

include all departments, bureaus, offices,
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 che preceding paragraph.


SECTION 4.
known as the

following provi

13, “Lmpoundrent Resolution” means a joint resolution

of both Houses of

geess_espressing approval or

disapproval of _a_tescission, reservation, deferral, or

suspension of an appropriation or several appropsiation

irems.as proposed by the President.

14, “Obligation” refers to an amount committed to be
paid by the Government for any Inwfal act made by an

for and in behalf of che Government,

authorized off

15. “Pram” refers t0 the functions and activities
necessary for the performance of a major purpose for

which a government agency is established.

16 —“Pmject? means a component of a progsam
covering « homogenous group of activities which results

in che accomplishment of an identifiable output.

enacted appropriation which has not yet been spent_or
obligated.

18. SReservation” means imposition of reserves onan

ay % racga ih

xecutive Order No, 2!

Section 37 of Chapter 5, Book VI of

“Administrative Cade of 1987, is hereby repealed and replaced with the

sion

“Section 32, Rencsrion_and Reservation of Appropriation —

Whenever the President 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 itis



1 provided, or that such budget appropriation should be

2 rescinded for fiscal policy or other reasons, including the
3 termination of authorized projects or_activines, or
4 whenever all or part of any budget appropriation for the
5 current fiseal year is to be reserved from oblivation for
6 such_fiseal_year, the President shall gansmit two both
7 Houses of Congress a Special Message specifving:

8

9 1, The amount of budget appropriation which che
0 President proposes to be rescinded or which is to be so
u reserved;

12

13 2 Any account, department, agency _or
4 strumentality of the Government to which such budget
15 appropriation is available for obligation, and the specific
16 rojects or poverumental functions involved

v

18 & ‘Che reasons why the budget appropriation sI

19 he rescinded, or is to he so reserved;

20

21 4, The estimated fiscal, economic _and budgetary

22 cfilvct of the proposed rescission or reser

24 & fact cl il cs un cs rion

25 rel & rs esciss: It ervalic

26 including its_hearing upon the _purposes,__ programs,
27 activities and projects for which such appropriation is
28 provided.”

29

30. SECTION 5. There shall be incorporated into Chapter 5, Book VI of Executive Order
31 No, 292 otherwise known as the “Administrative Code of 1987? four (4) new provisions
32 after Section 37, to read as follows:

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20

“Section 37-4, Approval of Rescicsion or Reservation —Both

Houses of Congress shall act on the proposed rescission

or reservation within forty-five (45) calendar davs after the
receipt of the Special Messape from the President made
pursuant to Section 37 by issuing « joint Impoundment

Resolution, approving or disapproving the proposal

Provided, ‘That if the President's Special Message is received

within period of less than forty-five (45) calendar days

before the end of a repular session, the President’s Speci

Message shall be deemed to have been submitted on chy

first diy of the succeeding regular session of Congress
and_the forty-five (45) day period referred to in_this

Section_shall commence onthe day after such first cay:
Provided, futher, ‘That if Congress does not issue an
Impoundment Resolution within the specifies d. the
disapproved: Provided, final, That (ands corresponding to
the rescinded appropriations _shall__revert to the

cept
as may be provided for in a subsequent Jaw enacted by

Congress.

“ Seotion 37-B, Us of Rene: — When changes in conditions
during the year justify the use of the _seserved
ave been imposed under this

a ¢ 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.

“Section 37-C. Deferral of Rorbases Whenever the President,

the Secretary of Budget and Management, the head of any.

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department, agency or instrumentality of the Government
proposes to defer the release of a specific appropriation,
che_Presidenr shall _teansmuir_to__the House _ of

Representatives and the Senate a Special Message

specifying:

L. The amount of the appropriadon proposed to be
deferred;

Any account, department, agency or instrumentality of

jovernn 1o_whi su propriarion is
available for obligation, and the specitic projects or

r S stances

2 o_any
invoked by him to justify such proposed defé 0
the objects, purposes, program, activities and pr

for which such appropriation is provided,



23

4

A deferral may not be proposed for any period of time

extending bevond the end of the fiscal vear in which che

Special Message proposing the deferral w
the House of Representatives and the Senate.

rite to

“Suction 37-D. Approval of Release Deferal—Both Houses of

Congress shall act on the proposed deferral within forry-

five (45) calendar days after the receipt _of the Special

Message (tom the President made pursuant 10 Section 37

Cz Provided, Thar if the President's Special Message _is

received within a period of less than forty-five (45)
calendar days before the end of « regular session, the

sessinn_of Congress and che forty-five (15) day_period
referred to in this Section shall commence on the day

alter such first day: Provided, further, ‘That if Congress does
tissue an Impoundment Resolurion within the

d_period, the President shall_procecd with the

-fasralprocedtires’

SECTION 6, Section 38 of Chaptet 5, Book VI of Executive Order No. 292 otherwise

known as the “Administratie Code of 1987,” is hereby repealed and replaced with the

following provision

“Section 38. Mode of Transmittal of the Special Messaue of the
President =the President shall transmit to Congeess at any
time during the budget year but not lates

fifteenth (15) day of October «
| Message referred to in Section 37 and Section 37-

of.the budget year the

Spec

€ of this Book, which may include one or more proposals

for rescission, reservation, or deferral on one or moze

appropriation items, through the Committee on Finance



1 if the Senare and the Committee on Appropriations of

2 the House of Representatives.”
3
4 SECTION 7. There shall be incorporated into Chapter 5, Book VI of Executive Order

No. 292 otherwise known as the “Administrative Code of 1987" a new provision after

5
6 Section 38, to read as follows:

8 “Section 38-A. Submission of Quarterly Reports —Within thirty
9 ) ter f cach quarter, the Secretary of
10 uddget ian: sha abt (s te
i pp tions and the Cor ittee of

12 House of Representatives and the Senate, respectively, a
13 list_of releases made out_of reserved and deferre
“W appropriations, and comparative statements showing the
15 propriations

8 apr A .

17 0 Ss sh allocatios
18 for cach department, agency, corporarion_and_fund:
19 Provided, Vhot_the releases from each lump-sum or special
20 pu s ith schedules indicating
21 Ns,__OF

Fa) of such releases. The quarterly reports shall also include a
24 cumulative _summary_of_all_appropriations rescinded,

29 SECTION 8. Section 33(6) of Chapter 5, Book VI of Executive Order No. 292
30 otherwise known as the “Administratize Cade of 1987" is hereby amended to read as

31 follows:



“Section 33. Allotment of Appropriations —Autborized
appropriations shall be allotted in accordance with the
procedure outlined hereunder

6, Pursuant to Sections 37, 37-A, 37-B, 37.

this Book, the Secretary shall have no authority to modify
or amend any allotment previously issned. In ease he shall
find, at any time, that the probable receipts from taxes or
other sources of any find will be less than anticipated and
that as a consequence the amount available for the
cemainder of the term of the appropriations or for any
allotment period will be less than the amount estimated or
allotted therefor, he shall with—the-approval-ol—the
President-andl-elier-noticee-(-the-departinent-of-agoney
sonectned recommend to the President the sedvee
reduction of the amount or amounts allotted he deems
necessary to conform to the targeted budgetary goals. ‘The
Preside fi sain

Sections 37,_37-A, 37-B, 37-C, 37-1 and 38 of this Book
for the approval _of requests for authority for che

suspensi sspenditures of appropriations.”

No, 292 otherwise known as the “Administrative Cade of 1987" a neo

Section 50), to read as follows:

Penal Brn Any violation of Sections

33,37, and 38, as amended, and Sections 37-A, 37-B, 37
7-12, and.
misuse of government funds and illegal expenditures and
punished as such in accordance with Sections 80 and 43
of Book VL”

SECTION 9. There shall be incorporated into Chapter 5, Book V1 of Executive Order

provision after

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ion of this Act, or any part thereof,

SECTION 10. Separability Clanse—It

\y prow
is declared unconstitutional, the same shall nor affect the validity and effectivity of the

other provisions and portions of this Act.

letters of

SECTION 11. Repealing Clase —All laws, decrees, executive orders,

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 12. Effectivity Clause —This Act shall tke effect fifteen (15) days alter its
complete publication in the Offoial Gazette or in at least nwo (2) national newspapers of

general circulation, whichever comes earlier.

Approved,