FIFTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
House Bill No, 1894

Introduced by Representative Ben P. Evardone

EXPLANATORY NO

‘The President drafts the proposal for the allocation of the yearly national budget
which is deliberated on by the bicameral congress. The Constitution qualify in Article VI
ection 25 (1) that "Congress may not inerease the appropriations recommended by the
President for the operation of the Government as specified in the budget. The form,
content and manner of preparation of the budget shall be prescribed by law."

‘Though there is this delineation of powers and evident disparity therein, we have
noticed in the past that the President can wield excessive control over budget spending,
‘The most common method of such restraining has been budget impounding. This
happens when the chief executive refuses to release, for political and/or other reasons,
Congress-appropriated funds for other public officials or for government institutions
Though it is true that the Administrative Code has vested unto the president such
authority to suspend expenditure of funds of an agency or a government official, it is
likewise true that this power, especially of recent times, has been misused and abused.
And we know what happens when funds do not get disbursed. Projects and delivery of
services are most likely delayed, if not canceled altogether.

This bill pushes for an increased congressional oversight ‘powers to fimit
executive control over the provisions of the General Appropriations Act. If this bill is
enacted, all appropriations shall be released immediately within the first semester of the
year with approved work and financial plans. Furthermore, instances of rescissions and
reservations deemed necessary by the President, with the recommendation of the
Department of Budget and Management, shall be sent to both houses of the Congress as a
proposal. The Congress shall act on this proposal in a period not less than 60 days before
the end of'a regular session, if not submitted within the last 60 days of a regular session,

In

Ww of the foregoing, immediate approval of this bill is carnestly sought.

BEN f ARDONE

Representative, Lone District of Eastern Samar


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FIFTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No, 1894

Introduced by Representative Ben P, Evardone

‘THE BUDGET IMPOUNDMENT CONTROL ACT

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

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

SECTION 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.

. (©) 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.
(8) Work-and-financial plan - the monthly breakdown of financial requirements
and physical performance targets of an agency.



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(g) Appropriations - unless otherwise described or specified herein, the term
appropriations refers to the appropriations included in the annual General
Appropriations Act.

SECTION 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 authotized 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.

SECTION 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.

SECTION 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. e


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SECTION 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;
(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 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 (o 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.

SECTION 8. Approval of Release Deterral. - 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

SECTION 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 cach department, agency, corporation and fund:
Provided, That the releases from each lump-sum or special-purpose fund shall be



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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.

SECTION 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
fone 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.

SECTION 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.

SECTION 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.

SECTION 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
general circulation, whichever comes

Approved,