Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

FIFTEENTH CONGRESS
First Regular Session

House Bit No.__ 806

Introduced by
HONORABLE EDCEL C. LAGMAN

EXPLANATORY NOTE

Admittedly, the country’s debt burden is less heavy today than it was during
the crisis years 1983 and 1991. However, it remains to be heavy and crisis-vulnerable,
It continues to crowd out provisions for basic social services and infrastructure
development from the national budget. The disproportionately large appropriation for
debt service has not only inordinately constricted budgetary allocation for basic social
services, but it has derailed economic growth.

For FY 2009, government allocated P343.421 billion for principal and P278.886
billion for interest payments of the National Government's debts. For the first quarter
of 2010, debt service already totaled P339.340 billion, P230.442 billion of which was
for principal payments and P108.898 billion was for interest servicing. For the same
period, the National Government's foreign debt service amounted to 28.1% of
exports.

Currently, Section 26 Chapter 4, Book VI of Executive Order numbered 292,
otherwise known as the “Administrative Code of 1987” provides for automatic
appropriation for debt service by reenacting in toto Section 31 of PD 1177. This
provision hinders Congressional efforts to more rationally and meaningfully allocate
government resources for the benefit of our people. It perpetuates the anomaly of a
Congress not being able to exercise to the full its power over the national purse.

Thus, Congress must reassert without further delay this potent constitutional
prerogative. This bill seeks to set things right by amending the said Section of E.0.
292, repealing in effect automatic appropriation for debt service. The repeal of
automatic appropriation will actualize an effective and responsive determination of the
true budgetary priorities of the nation as expressed by the people through their
Representatives.

Considering the critical immediacy of subjecting the appropriation of funds for

debt service to the scrutiny of our people through their duly elected Representatives,
the prompt approval of this proposed measure is earnestly sought.

EDCEL C. LAGMAN


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

FIFTEENTH CONGRESS
First Regular Session

House BrLNno.__806

Introduced by HON. EDCEL C. LAGMAN

AN ACT
AMENDING SECTION 26, CHAPTER 4, BOOK VI OF EXECUTIVE ORDER
NUMBERED 292, OTHERWISE KNOWN AS THE “ADMINISTRATIVE CODE OF
1987”

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

SECTION 1. Section 26, Chapter 4, Book VI of Executive Order numbered
292, otherwise known as the “Administrative Code of 1987", is hereby amended to
read as follows:

“SEC. 26. Automatic Appropriations - All expenditures for [(1)]
personnel retirement premiums, government service insurance, and
other similar fixed SOCIAL SECURITY expenditures[, (2) principal
and interest on public debt, (3) national government guarantees of
obligations which are drawn upon,] are automatically appropriated:
Provided, That no obligations shall be incurred or payments made
from funds thus automatically appropriated except as issued in the
form of regular budgetary allotments.”

SEC. 2. This Act shall take effect upon its approval.

Approved,