TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL-3 P5 50
SENATE
S.B. No. 115
Introduced by SENATOR IMEE R. MARCOS
AN ACT
TO REFORM THE BUDGET PROCESS BY ENFORCING GREATER
ACCOUNTABILITY IN PUBLIC FINANCIAL MANAGEMENT (PFM), 
PROMOTING FISCAL SUSTAINABILITY, STRENGTHENING CONGRESS' 
POWER OF THE PURSE, INSTITUTING AN INTEGRATED PFM SYSTEM, 
INCREASING BUDGET TRANSPARENCY AND PARTICIPATION, AND FOR
OTHER PURPOSES
EXPLANATORY NOTE
It is extremely vital and necessary for a country to carefully design and properly 
implement an up-to-date, comprehensive, and efficient Public Financial Management 
(PFM) system to hasten the nation's goal of poverty eradication, address the weakness 
in budget credibility and transparency, strengthen delivery of government services to 
adequately respond to the needs of the general public, and devise strategic plans 
geared towards the attainment of predetermined goals and objectives set by the 
government.
The most crucial blueprint for the annual national socio-economic policy of the 
government and its main tool for carrying out its policy objectives is the national 
budget. With Executive Order No. 91, s. 2019, the Budget Modernization Act seeks the 
institutionalization of the Cash-based Budgeting System (CBS) to strengthen fiscal 
discipline in the allocation and use of budget resources. Provided that we are looking 
into an expanded national budget, the government must ensure that every peso will 
be utilized and reflected in the programs and projects to be delivered.1
1 Parrocha, A. (2023). DBM Still Pushing For Passage of Budget Modernization Bill. Philippine News Agency. 
Accessed online through https://www.pna.gov.ph/articles/1191945


Having an effective Public Financial Management system will subsequently yield 
stronger financial efficiency, transparency, and accountability.2 However, there are 
several pertinent issues pertaining to the Public Financial Management (PFM) system 
of the country which may cause the ineffectiveness of the national budget Hence, the 
manner of its preparation and execution must conform to the reforms contained in this 
measure. In the Philippines, budget reforms had a long record that can be traced back 
in the past administrations where a few successfully progressed while some of which 
were completely abandoned.3 Although efficient programs were crafted to ensure fiscal 
discipline and civic accountability, the Public Financial Management (PFM) system of 
the country is not exempted from public criticism and constitutional scrutiny. One of 
the fundamental concerns being emphasized with the country's Public Financial 
Management (PFM) system is that the legal framework that governs the said budget 
process is already outdated, if not unresponsive.
The timely monitoring and delivery of budget outcomes promised to the 
legislature during the budget authorization process have been compromised by the 
failure of government agencies to develop adequate internal control mechanisms. In 
the case where the legislature seem to have a weak capacity to effectively monitor and 
assess the performance of government agencies in the same way that their budget 
information and accounting systems are being observed, it will result them to becoming 
ineffective at overseeing and facilitating the accomplishment of the promised budget 
outcomes.
This bill seeks to address this issue by enforcing the authority of Congress to 
authorize all appropriations and holding the government responsible for the utilization 
and proper allocation of public funds. This ensures that all government agencies are 
accountable for proposing, carrying out, and delivering committed results in a timely, 
predictable, and cost-effective manner. Furthermore, this bill strengthens the 
integration of planning, programming, budgeting, accounting, disbursement, reporting, 
and performance management and ensures ample safeguards in managing public 
finances. Further, this measure seeks to institutionalize the increased budget reliability 
and the role of accountability in the budget process as the final stage after budget 
preparation, authorization, and execution. Additionally, the proposed action will ensure 
not only a strong sense of accountability and transparency but also the efficient and 
effective provision of public services while promoting fiscal sustainability and 
strengthening the oversight powers of the Congress in the national budget. To make
2 Zhang, W. (2016). Global Trends in Public Financial Management. Asian Development Bank
3 Diokno, B. (2014). Recent Philippine Budget Reforms: Separating The Chaff From The Crain, The Whimsical
From The Real. The Philippine Review of Economics.


sure that public resources are in line with national priorities, this measure improves the 
budget development process.
More importantly, considering the significant repercussions and negative effects 
brought about by the pandemic, now, more than ever, there seems to have an urgent 
need for a budgetary framework to extensively restructure and develop the 
management of public resource that will aid in providing proactive and efficient service 
to the people especially when they need it the most.
In view of the foregoing reasons, the passage of this bill is earnestly sought.


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JiJL-3 P5 50
i’ ; .
SENATE
S.B. No. 1 1 .S
Introduced by SENATOR IMEE R. MARCOS
AN ACT
TO REFORM THE BUDGET PROCESS BY ENFORCING GREATER 
ACCOUNTABILITY IN PUBLIC FINANCIAL MANAGEMENT (PFM), 
PROMOTING FISCAL SUSTAINABILITY, STRENGTHENING CONGRESS' 
POWER OF THE PURSE, INSTITUTING AN INTEGRATED PFM SYSTEM, 
INCREASING BUDGET TRANSPARENCY AND PARTICIPATION, AND FOR
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
Chapter 1
Preliminary Provisions
SECTION 1. Short Title. - This Act shall be known as the "Budget Modernization
Act"
SEC. 2. Declaration of Policy and Objectives. - It is hereby declared the policy 
of the State to ensure accountability and integrity in the use of public resources by 
ensuring transparency, fiscal responsibility, results-orientation, efficiency, and 
effectiveness. This shall be upheld through the establishment of an integrated system 
of planning, programming, budgeting, management, accounting, reporting and review 
of public finances, wherein internal controls are embedded within these processes.
In pursuit of these policies and requirements, the State shall pursue the following 
specific objectives:
(a) To enforce the power of Congress to authorize all appropriations and hold 
government accountable in the use of public resources, as well as to ensure 
the responsibility of all government agencies to propose, execute and deliver


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
committed results in the appropriations act in a timely, predictable, and 
economic manner;
(b) To promote people's involvement in the management of public resources by 
enforcing their right to access information on, and to contribute in the 
formulation and implementation of, the financial affairs of the government; 
and
(c) To strengthen the integration of planning, programming, budgeting, 
accounting, disbursement, reporting and performance management and 
ensure ample safeguards in managing public finances through internal 
controls and risk management.
SEC. 3. Scope and Coverage. - The provisions of this Act shall apply to the 
management of revenues, expenditures, financing arrangements, and assets and 
liabilities of national government agencies (NGAs), government-owned or -controlled 
corporations (GOCCs), and local government units (LGUs) to the extent provided herein.
SEC. 4. Definition of Terms- The following terms when used in this Act and the 
implementing rules and regulations (IRR) should be understood, as follows:
(a) Activity refers to a recurring work process that contributes to the 
implementation of a program or sub-program;
(b) >4//o//77e/7f refers to the authorization issued to Government Agencies to incur 
contractual commitments and disburse funds up to a certain amount, for a 
specified public purpose, and within a specified period of time, in accordance 
with the Appropriations Law;
(c) Allotment Class refers to the classification of expenditures under an item of 
appropriation with the following categories: Personnel Services, Maintenance 
and Other Operating Expenses, Financial Expenses, and Capital Outlays;
(d) Appropriations refers to an authorization pursuant to laws directing the 
disbursement of public funds under specified conditions or for specified public 
purposes;
{e) Appropriations Law refers to either a general or special appropriations law;
(0 Cabinet refers to the Executive Secretary and the Secretaries of the 
Departments under the Executive Branch;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
(g) Cash Budgeting System refers to the annual appropriations that limit incurring 
obligations and disbursing payments to goods delivered and services 
rendered, inspected and accepted within the current fiscal year, payments, 
of which, may be settled within the Extended Payment Period;
(h) Development Budget Coordination Committee (DBCC) refers to the body 
primarily responsible for the review and approval of the macroeconomic 
targets, revenue projections, borrowing level, aggregate budget level and 
expenditure priorities and the recommendation to the Cabinet and the 
President of the consolidated public sector financial position and the National 
Government fiscal program. The Secretary of Budget and Management leads 
the DBCC, with the Secretary of Finance, the Director General of the National 
Economic and Development Authority (NEDA) Secretariat and a 
representative from the Office of the President as members, and the 
Governor of the Bangko Sentral ng Pilipinas (BSP) as resource person;
(i) Disbursement refers to settlement of government obligations either in the 
currency, check or constructive cash such as the issuance of Tax Remittance 
Advice for the remittance to BIR of taxes withheld from employees and 
suppliers and Non-Cash Availment Authority for direct payments made by 
international financial institutions to suppliers and consultants of foreign 
assisted projects;
(j) Extended Payment Period refers to the first three (3)-month period in the 
following fiscal year when payments, chargeable against the Appropriations 
Law of the previous fiscal year, can be processed and disbursed for goods 
delivered and services rendered, inspected and accepted by the end of the 
previous fiscal year;
(k) Fiscal Kear refers to a period of twelve (12) months commencing on January 
1 until December 31;
(l) Government Agencies collectively refer to all NGAs, GOCCs and LGUs;
(m) Government-Owned or -Controlled Corporations refer to agencies with 
corporate powers, organized as a stock or non-stock corporation, vested with 
functions relating to public needs whether governmental or proprietary in 
nature, and owned by the Government of the Republic of the Philippines 
directly or through its instrumentalities either wholly or, where applicable as 
in the case of stock corporations, to the extent of at least a majority of its 
outstanding capital stock. This includes Government Financial Institutions,


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
government instrumentalities with corporate powers, government corporate 
entities and related corporations;
(n) Government Financial Institutions refer to financial institutions or 
corporations in which the government directly or indirectly owns the majority 
of the capital stock and which are either: (i) registered with, or directly 
supervised by, the Bangko Sentral ng Pilipinas, or (ii) authorized to collect or 
transact funds or contributions from the public and place them in financial 
instruments or assets such as deposits, loans, bonds and equity;
(o) Head of Agency refers to the head of the department or agency in the case 
of NGAs, the Board of Directors or Trustees or its duly authorized officials in 
the case of GOCCs, State Universities and Colleges (SUCs) and local water 
districts, and the local chief executive in the case of LGUs;
(p) Item of Appropriation refers to the amount of appropriations for an activity 
or project in the Appropriations Law;
(q) Local Government Units refer to provinces, cities, municipalities, and 
barangays, as well as autonomous regions created by law pursuant to the 
Constitution;
(r) Multi-Year Contracting Authority (MYCA) refers to the authority issued by 
DBM to agencies, covering the full contract cost, for the procurement of multi­
year projects;
(s) Multi-year Projects refer to projects undertaken by agencies covering a period 
of more than one fiscal year and exceeding twelve months;
(t) National Government Agencies refer to units of the National Government, as 
distinguished from GOCCs and LGUs, which include any of the departments, 
bureaus, offices or instrumentalities of the Executive, Judicial and Legislative 
branches of government, as well as the Constitutional Commissions, 
Commission on Human Rights and the Office of the Ombudsman;
(u) Program refers to a group of activities and projects that contribute to a 
common particular outcome;
(v) Project refers to a special undertaking carried out within a definite time frame 
and intended to result in some pre-determined measure of goods and 
services;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
(w) Proposed National Budget refers to a financial plan of annual revenue and 
expenditures to be submitted by the President to Congress that reflect 
national policies, pursuant to Section 22 of Article VII of the Constitution;
(x) Public Officials and Employees refer to elective and appointive officials and 
employees, in a permanent or temporary capacity, whether in the career or 
non-career service, including military and uniformed personnel, regardless of 
the rank, form or amount of compensation;
(y) Public Funds refer to the monies of all Government Agencies received, 
collected, receivable from taxes, fees, charges, penalties, income, dividends, 
interest earnings, domestic loan proceeds, external loans and grants, 
proceeds from the sale of assets, that the Government has a legal right to 
retain and use;
(z) Spill-over Projects refer to contracts authorized and undertaken in the 
immediately preceding General Appropriations Act (GAA) which were not fully 
implemented;
(aa) Subsidiary refers to a corporation where at least a majority of the 
outstanding capital stock is owned or controlled, directly or indirectly and 
through one or more intermediaries, by a GOCC; and
(bb) Treasury Single Account (TSA) refers to the account maintained by the 
Bureau of the Treasury (BTr) with the BSP or agent bank for a unified 
structure of government bank accounts to enable consolidation and optimum 
utilization of government cash resources.
In this Act, the singular may be read as the plural and the plural may be read as 
the singular, as the context requires.
Chapter 2
Budget Preparation, Execution, and Adjustment
SEC. 5. Governing Principles in Budget Preparation. - There is hereby 
established a set of governing principles to be observed by the NGAs and GOCCs in the 
preparation of their annual budget proposals, and by the DBM in the preparation, and 
the presentation to Congress, of the Proposed Annual National Budget:


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
(a) Cash-based estimates shall be adopted in the proposed general and special 
appropriations bills to promote faster and more effective delivery of services;
(b) The overall expenditure program of the government for a given Fiscal Year 
shall be included, identifying those requiring approval by Congress and those 
authorized under existing laws;
(c) All sources of funds and authorized uses available to the agency shall be 
considered in the evaluation of agency proposals and determination of agency 
budget levels, and shall likewise be disclosed in the Proposed National Budget 
and reports;
(d) Evaluation of agency proposals may include the analysis of a development 
plan, master plan or road map, agency capability as demonstrated by 
previous years' performance, its contribution to projects and activities of 
other agencies, utilization of funds appropriated or released, and such other 
criteria as may be determined by the DBM. The performance shall be 
evaluated based on the actual disbursements and contractual commitments 
as compared to the appropriations;
(e) All appropriations in the GAA shall be valid for one Fiscal Year, reckoned from 
the effectivity thereof until the end of the Fiscal Year concerned. When 
necessary or appropriate, a three-month Extended Payment Period in the 
following Fiscal Year may be availed of to allow agencies to settle payments 
for goods and services delivered, inspected and accepted during the previous 
Fiscal Year;
(f) For evaluating the performance of an agency, programs, activities and 
projects shall be presented in such a way as to identify the entity responsible 
for the expenditure and the intended results from the use of the 
appropriations;
(g) Both the financial and non-financial performance of agencies shall be 
presented in the Proposed National Budget to ensure a performance informed 
budget; and
(h) Programs, activities and projects shall be reflected by department, agencies, 
bureaus, and offices, and shall be presented for information purposes, by 
region and province, and eventually, by city or municipality.


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
SEC. 6. Planning-Programming-Budgeting Linkage. - Development strategies 
identified in the Philippine Development Plan (PDP) shall be the primary consideration 
in the formulation of the Budget Priorities Framework. These shall also be the basis for 
drawing up strategic and prioritized programs and projects in the multi-year Public 
Investment Program (PIP), which in turn will be considered in the formulation of the 
annual agency budgets that conform to the annual budget ceilings approved by the 
President.
The PIP shall be reflective of the Regional Development Investment Programs 
that, in turn, also take into consideration the intra-regional and inter-provincial 
development plans and investment programs of the local government units within each 
region.
The implementation of programs and projects funded under the annual agency 
budgets shall be monitored to ensure economy, efficiency, and effectiveness in the use 
of public funds. Monitoring and evaluation of these projects shall cover, among others, 
the planned and actual performance of agencies, citing reasons for deviation and/or 
poor absorptive capacities. The results of the project valuation shall inform the 
assessment of subsequent plans and budget proposals of agencies.
SEC. 7. Budget Priorities Framework. - The DBCC shall submit to the President 
and Cabinet, not later than March of each year, a Budget Priorities Framework to guide 
the formulation of the Proposed National Budget for the following year. It shall contain 
the targets underlying the budget; the priority areas for government spending reflected 
in the PDP and PIP, estimated amount and planned allocation of the fiscal space; and 
other requirements laid down in the IRR.
SEC. 8. The Budget Preparation Process. - The DBM shall determine the budget 
preparation process and calendar. The budget preparation process shall cover: (i) 
NGAs; (ii) GOCCs with respect to their impact on revenue, expenditure, assets, and 
liabilities and risks of the government; and (iii) LGUs as to their impact on revenue and 
expenditure of the government.
SEC. 9. The Proposed National Budget - The President shall submit to Congress, 
within thirty (30) days from the opening of every regular session, the Proposed National 
Budget, which shall be the basis of the General Appropriations Bill (GAB).
The President shall determine the form and content of the Proposed National 
Budget which shall include, but not limited to, the following:
(a) President's Budget Message - provides a preview of the Proposed National 
Budget, explaining the principles, objectives and policy framework adopted 
and the spending priorities for the Fiscal Year;


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
(b) Budget of Expenditures and Sources of Financing (BESF) - contains the 
macroeconomic parameters; dimensions of three-year (3-year) expenditure 
program, revenue, financing, and outstanding debt; overview of the financial 
positions of GOCCs, LGUs, and public-private partnership projects, list of new 
multi-year projects, including the project duration, the total project cost and 
contractual authorities issued as well as the other items listed in the IRR;
(c) National Expenditure Program (NEP) - includes the strategic objectives, 
details of the three-year (3-year) expenditure program, performance 
information, such as key strategies, outputs and outcomes for agencies in 
relation to their budgets; and
(d) Staffing summary.
Congress may not increase the appropriations recommended by the President 
for the operations of government as specified in the Proposed National Budget.
The President shall publish the Proposed National Budget on the Government 
website on the same day it is presented to Congress.
SEC. 10. Program Classification. - The Proposed National Budget shall adopt a 
structure based on a program classification that groups line items under the objectives 
or outcomes to which they contribute to. Performance information shall be provided for 
each program to facilitate the evaluation of its cost effectiveness and provide better 
information for analysis and feedback for planning and prioritization of expenditures.
In addition, the performance information and targets contained in the Proposed 
National Budget shall be updated after the passage of the GAA taking into consideration 
the amount appropriated for each program. For this purpose, NGAs and GOCCs shall 
propose adjustments in its outputs and outcomes for the consideration and approval of 
the DBM.
SEC. 11. Special Purpose Funds. - To promote the transparent and detailed 
disclosure of all proposed government spending. Special Purpose Funds (SPFs) in the 
Proposed National Budget shall be limited to the: (1) the NDRRMF; (2) the Contingent 
Fund; (3) Statutory Shares of LGUs; and (4) other SPFs not falling under any of the 
preceding purposes, the details of which could not be determined during the budget 
preparation stage, and based on the parameters to be set in the IRR.
SEC. 12. National Disaster Risk Reduction and Management Fund. - The 
NDRRMF shall be used for: (1) disaster risk reduction or mitigation, prevention and 
preparedness activities, such as, but not limited to, training of personnel, procurement 
of equipment, and capital expenditures; and (2) relief, recovery, reconstruction and 
other work or services in connection with natural or human induced calamities which 
may occur during the budget year or those that occurred in the preceding two (2) years.


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Of the amount appropriated for the NDRRMF, there shall be specific allocation 
as Quick Response Fund (QRF), as may be provided under existing law, which shall be 
used as a standby fund in order that the situation and living conditions of people in 
communities or areas stricken by natural or human induced calamities, epidemics, 
crises, and catastrophes may be normalized as quickly as possible.
The NDRRMF and QRF shall also be used for obligation and payment of Spillover 
Projects approved or funded from the NDRRMF or QRF of the immediately preceding 
Fiscal Year.
Releases from the NDRRMF, except for QRF and Spill-over Projects, shall be 
subject to the prior approval of the President, who may take into consideration the 
recommendation of the National Disaster Risk Reduction and Management Council for 
local disasters and calamities and the appropriate agency for international crises.
SEC. 13. Contingent Fund. - The Contingent Fund shall cover the funding 
requirements of new or urgent projects or activities of NGAs, GOCCs, and LGUs that 
need to be implemented or paid during the year, such as: (i) legal obligation of the 
government arising from the final and executory decisions of competent authorities, 
including arbitration awards, mediation settlement, or compromise agreements; (ii) 
requirements of newly created offices; or (iii) deficiencies in the appropriations for local 
and external travels of the President of the Philippines.
Releases from the Contingent Fund shall be subject to approval by the President 
of the Philippines, other than payment resulting from final and executory decisions of 
competent authorities, which shall be released by the DBM subject to availability of 
funds.
SEC. 14. Mandatory Reporting. - The DBM shall submit reports to Congress of 
all releases from the Special Purpose Funds in the quarterly and annual fiscal reports 
including information on the date of release, the amount covered, corresponding 
purpose/s and recipient agency.
SEC. 15. Statutory Shares of Local Government Units. - The shares of LGUs in 
the proceeds from national taxes and other transfers to LGUs authorized by law shall 
be released to the LGUs in accordance with the provisions on the use, allocation, and 
release of the funds as may be provided in pertinent laws, rules and regulations.
SEC. 16. Unprogrammed Appropriations. - Congress may authorize standby 
appropriations to cover the funding requirements of other priority projects and activities 
or contingencies, as well as provide appropriations cover for foreign-assisted projects 
(FAPs) not specifically included in the programmed component of the GAA that requires 
implementation during the year. The Unprogrammed Appropriations shall indicate the 
purposes from which the amount authorized therein may be used. The Unprogrammed


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Appropriations shall not exceed three percent 3% of the total proposed expenditure, 
net of contractual, statutory and other legal obligations in the programmed component 
of the GAA.
Expenditures to be funded under the Unprogrammed Appropriations may be 
authorized only when supported by: (i) excess revenue collections in any one of the 
particular non-tax revenue sources from its corresponding revenue collections target in 
the BESF as certified by the BTr; (ii) new revenue collections or those arising from new 
tax or non-tax revenues which are not part of the original revenue sources in the BESF; 
or (iii) when there are approved loan proceeds for new and ongoing FAPs.
In no case shall the Unprogrammed Appropriations be activated or released 
when the DBCC determines that there is a risk of breaching the fiscal objectives set 
forth in the Statement of Fiscal Policy.
Releases from the Unprogrammed Appropriations shall be subject to the prior 
approval of the President of the Philippines, other than the final and executory decisions 
of competent authorities, including arbitration awards, mediation settlement, or 
compromise agreements.
The DBM shall include information on releases from releases from the 
Unprogrammed Appropriations in the quarterly and annual reports submitted to 
Congress.
SEC. 17. Budget with Accounts Codes. - All items of appropriations in the 
Appropriations Law shall be given accounts codes by the DBM pursuant to the Unified 
Accounts Code Structure that applies to all the assets, liabilities, equities, income, and 
expenses of the government. Provided that, such shall be given after the signing of the 
GAA by the President.
SEC. 18. Re-enacted Budget - If, by the end of any Fiscal Year, Congress has 
failed to enact a GAA for the ensuing Fiscal Year, the GAA of the preceding Fiscal Year 
shall be deemed re-enacted and shall remain in force and effect until a GAA for the 
ensuing Fiscal Year is passed by the Congress.
Consistent with the Fiscal Responsibility Principles, the re-enacted budget shall 
be enforced as follows:
(a) The aggregate level of the re-enacted budget shall be limited to the total 
amount appropriated in the preceding year's GAA, but shall in no case exceed the level 
of the sources of financing under the BESF of the Proposed National Budget for the 
year;
10


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
(b) The appropriations for the following shall be limited to the amount authorized 
under the re-enacted budget, but in no case exceed the amount in the Proposed 
National Budget;
1. Ongoing programs, projects and activities;
2. Personnel benefits, including retirement gratuities, pensions, terminal leave 
pays and related expenses;
3. NDRRMF, Contingent Fund, Statutory Shares of LCDs, and other SPFs;
4. Budgetary support to GOCCs for their operational requirements and ongoing 
programs, activities or projects; and
5. Newly-approved FAPs.
(c) In no case shall the following items of the re-enacted budget be considered 
for release, disbursement, and utilization:
1. 
Completed programs, projects and activities funded in the GAA of the
preceding Fiscal Year; and
2. 
Equity contribution of the National Government to GOCCs.
The DBM shall issue guidelines on the aggregate and agency levels of 
appropriations authorized under the re-enacted budget in accordance with the 
foregoing, supporting requirements to determine actual needs, and other pertinent 
rules in the implementation of the re-enacted budget.
Upon enactment of the GAA anytime during the current Fiscal Year, all releases 
under a re-enacted budget consistent with this Section shall be considered valid 
obligations and deemed to have been implemented pursuant to and charged against, 
for account recording purposes, the GAA for the current Fiscal Year.
The enacted GAA shall be valid from its effectivity until the end of the current 
Fiscal Year.
SEC. 19. Special Appropriations Bill. - A Special Appropriations Bill is a proposal 
submitted by the President, as recommended by the DBM, before Congress to provide 
authorization for expenditure for a specific purpose not included or not covered under 
the annual appropriations laws. It shall specify the purpose/s for which it is intended 
and the validity period which shall not exceed one (1) year from its enactment.
Cash-based estimates shall be adopted in the proposed special appropriations 
bills to promote faster and more effective delivery of services.
11


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
A Special Appropriations Bill shall be supported by funds actually available as 
certified by the National Treasurer, or to be raised by a corresponding revenue measure 
proposed therein.
No Special Appropriations Bill shall be passed during a re-enacted budget, except 
for the following: (1) disaster-related purposes; (2) urgent projects and/or activities; 
and (3) unforeseen requirements of the government.
SEC. 20. Release of Public Funds. - The government shall commence releases 
of Public Funds covered by an Appropriations Law as soon as it comes into force to 
ensure timely and efficient disbursement by the appropriate implementing agencies, 
subject to pertinent budgeting, accounting and auditing rules and regulations. Upon the 
implementation of the cash budgeting system, the Appropriations Law shall be 
considered the authority of the agencies to contract out and disburse funds, except for 
the following instances: (i) when provided in the Appropriations Law; and (ii) when the 
appropriations have requirements before release, such as work and financial plan, 
feasibility study, pre-feasibility study, and preliminary and detailed engineering.
SEC. 21. Cash Budgeting System. - Appropriations authorized in the GAA for 
NGAs, budgetary support to GOCCs, national projects implemented by LGUs, and SPFs, 
shall be available for obligation only until the end of each Fiscal Year unless release of 
funds was made during the last quarter of the year, the allotment is available for 
obligation until the first semester of the succeeding year. Obligations incurred by the 
National Government within each Fiscal Year shall be implemented during the same 
Fiscal Year. Goods and services corresponding to said obligations shall be delivered or 
rendered, inspected and accepted by the end of each Fiscal Year. Payments for 
obligations incurred shall be made until the end of the Extended Payment Period. 
Payments during the Extended Payment Period shall be chargeable against the GAA of 
the preceding Fiscal Year.
Appropriations covering financial subsidy to LGUs shall be available for obligation 
and disbursement until the end of the succeeding Fiscal Year. On the other hand, 
appropriations for the statutory shares of LGUs shall be available for obligation and 
disbursement until fully expended.
All funds transferred between or among Government Agencies shall not be 
considered disbursed until the transferred amounts have been actually utilized to pay 
for goods delivered and services rendered, inspected and accepted.
Any unreleased appropriations at the end of the Fiscal Year shall lapse, while 
unobligated allotments and unexpended or undisbursed funds at the end of the 
Extended Payment Period shall revert to the unappropriated surplus of the General Fund 
in accordance with Section 28, Chapter 4, Book VI of E.O. No. 292 and shall not 
thereafter be available for expenditure except by subsequent legislative enactment. For
12


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
financial subsidies to LCDs, reversion shall be made to the National Treasury after the 
end of the succeeding Fiscal Year.
SEC. 22. Government Funding Commitment. - In accordance with the 
Constitution, no money shall be paid out of the Treasury except in pursuance of an 
appropriation made by law.
Accordingly, a Certification of Availability of Funds (CAF) shall be required prior 
to entering into contract. The CAF shall be issued by the Chief Accountant or the highest 
accounting officer in the agency.
For Multi-year Projects, the CAF shall be issued annually based on the annual 
budget for the year. In case of Multi-year Projects with no funding requirement on any 
given year, the CAF shall be the certification of the chief accountant that no fund is 
needed for the year as indicated in the approved MYCA.
The CAF shall be stamped or appended to the contract and shall become an 
integral part thereof.
SEC. 23. Muiti-Year Contracts. - The issuance of a MYCA or any similar 
document shall be required before agencies may enter into multi-year contracts, subject 
to the requirements and guidelines prescribed by the DBM. Provided, That for foreign- 
assisted projects funded by foreign loans, the issuance of a MYCA shall no longer be 
necessary.
In the procurement of multi-year projects, the MYCA or any similar document 
shall be required prior to commencement of any procurement activity.
In the case of GOCCs, they shall secure prior authority from their respective 
governing boards before entering into multi-year contracts.
For LCDs, they shall secure any equivalent document issued by their respective 
sanggunian authorizing them to enter into multi-year contracts.
For the multi-year Public-Private Partnership projects with government 
undertakings authorized under R.A. No. 6957, as amended by R.A. No. 7718, the same 
shall be covered by a letter of commitment issued in accordance with the guidelines 
issued by the DBM.
The implementing agency shall ensure that the annual funding requirements for 
the multi-year projects shall be included in its budget proposals for the covered years, 
consistent with the funding schedule in the MYCA and equivalent authorities, and letter 
of commitment. In the case of NGAs and qualified GOCCs, the DBM shall ensure that 
the funding requirement for the multi-year projects are included in the National
13


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
Expenditure Program to be submitted to Congress who shall give due consideration of 
the said proposal. In the case of GOCCs and LGUs, due consideration shall be given by 
the governing board of GOCCs and the sanggunian of the LGUs, respectively.
In all instances, the disbursements to be incurred for multi-year contracts shall 
in no case exceed the appropriations for the purpose during the year. Procurement of 
multi-year projects shall be subject to the provisions of R.A. No. 9184 and its IRR and 
GPPB guidelines.
SEC 24. Early Procurement Activities. - To ensure full budget utilization, timely 
contract implementation and efficient delivery of services, agencies are authorized to 
undertake procurement activities from pre-procurement conference until 
recommendation to the head of the procuring entity as to the award of contract, based 
on their proposed budget in the NEP, COBs or Appropriations Ordinance, in accordance 
with the guidelines issued by the Government Procurement Policy Board.
In exceptional circumstances where the early procurement activity was delayed, 
agencies shall undertake only the procurement of goods, infrastructure and consulting 
services to the extent that may be delivered or rendered, inspected, and accepted 
during the Fiscal Year consistent with the cash budgeting system.
For FAPs, agencies may undertake early procurement activities based on the 
amount proposed by the agency in the NEP including those under the Unprogrammed 
Appropriations and shall be awarded only upon approval of the loan agreement.
For multi-year projects, the issuance of a MYCA by the DBM is required prior to 
commencement of any procurement activity. All existing Multi-Year Obligational 
Authority shall be understood to refer to MYCA.
Notwithstanding the mandatory procurement timelines, agencies may only 
proceed with the issuance of the notice of award of contract upon approval or 
enactment of their respective appropriations or budget authorization document, as the 
case may be, and based on the amount authorized therein.
SEC. 25. Timely Implementation of Activities or Projects. - Government 
Agencies shall ensure that all activities or projects are fully delivered, inspected, and 
accepted by the end of the Fiscal Year.
In exceptional circumstances where the implementation of an activity, or a 
project has been delayed due to force majeure or other justifiable reasons as 
determined by the agency or decided by a competent authority, and in both instances 
without the fault of the contractor, the funding requirements for its completion shall be 
chargeable against any available fund in the succeeding Fiscal Year, upon approval of 
DBM.
14


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
SEC. 26. Authority to Declare and Use Savings. - The President of the 
Philippines, the President of the Senate of the Philippines, the Speaker of the House of 
Representatives, the Chief Justice of the Supreme Court, the Heads of the Civil Service 
Commission, the Commission on Elections, and the Commission on Audit are hereby 
authorized to declare and use savings in their respective appropriations in the current 
year to augment actual deficiencies incurred for the current year in any item of their 
respective appropriations.
SEC. 27. Meaning of Savings. - Savings refer to portions or balances of any 
released appropriations in the Appropriations Law which have not been obligated as a 
result of any of the following:
(a) 
Completion, final discontinuance, or abandonment of an activity or project 
for which the appropriation is authorized; or
(b) 
Implementation of measures resulting in improved systems and 
efficiencies and thus enabled an agency to meet and deliver the required or planned 
targets at a lesser cost.
In case final discontinuance or abandonment is used as basis in the declaration 
of savings, such discontinued or abandoned activity or project shall no longer be 
proposed for funding in the next two (2) Fiscal Years.
Allotments that were not obligated due to the fault or negligence of the agency 
concerned shall not be considered savings.
SEC. 28. Rules on Augmentation. - Augmentation is the act of the constitutional 
officers authorized to use savings in their respective appropriations to cover a deficiency 
in any existing item of appropriation for their respective offices.
The particulars of the expenditure to be funded from savings should be within 
the scope of, or be covered by, an existing item of appropriation. The existence of an 
item of appropriation regardless of the availability of allotment class/es is sufficient for 
the purpose of augmentation.
In no case shall a non-existent item of appropriation be funded by augmentation 
from savings.
SEC. 29. Rules on Modification in the Allotment - Limited flexibility shall be 
given to NGAs to modify or change the allotment within an existing item of 
appropriation. Such modification shall not entail any augmentation of the amount 
appropriated for the said item of appropriation during budget execution.
The DBM shall issue rules and procedure to govern modification in the allotment, 
specifying the cases or circumstances when such modifications maybe undertaken to
15


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
ensure the uniform implementation among the various branches of government, the 
proper recording of modifications, and the timely submission of reports by all the offices 
concerned.
Chapter 3
Financial Management
SEC. 30. General Fund. - All monies received by NGAs, whether coming from 
taxes, fees, charges, penalties, income, dividends, interest earnings, loan proceeds, 
grants, donations, asset sale proceeds and such other receivables, shall accrue to the 
General Fund and be remitted to the National Treasury, unless otherwise provided by 
law or stipulated by covering loan or grant agreements. Monies under the General Fund 
shall be made available to support the requirements of the National Government 
authorized in an Appropriations Law.
A Special Account in the General Fund (SAGF) shall be established by law only 
under exceptional circumstances to recognize taxes, fees, charges, penalties, income, 
dividend, interest earnings, grants, and donations collected, earned or received by NGAs 
for specified purposes. All laws authorizing the establishment of SAGFs shall specify the 
period of use thereof, or if no period is specified, it shall be deemed to be until the 
fulfilment of the purpose for which the SAGF was authorized. All interests earned by 
SAGFs shall accrue to the General Fund. The balance of SAGFs upon their termination 
shall form part of the General Fund.
All earmarked revenues with significant inflows, a large portion of which are not 
or not expected to be programmed for disbursement during the Fiscal Year, shall be 
treated as Trust Funds and recorded as trust receipts. Proceeds from these Trust Funds 
shall be recognized only as revenue inflow in the General Fund when programmed to 
be spent for the year.
The Permanent Committee created under Executive Order (EO) No. 292, s. 1987, 
composed of the Secretary of Finance as Chairperson, the Secretary of Budget and 
Management and the Chairperson of the COA as members, shall identify SAGFs that 
shall be converted into Trust Funds. The recognition of revenue inflows from these 
SAGFs converted into Trust Funds shall be governed by the guidelines to be issued by 
the Permanent Committee. In all cases, the authorized uses or purposes shall continue 
to be those specified in the law creating the SAGFs.
SEC. 31. Special Funds. - In exceptional cases when an SAGF is not suitable for 
the operations of a fund. Special Funds shall be authorized by law and limited to the 
following:
16


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
(a) 
Trust Fund - constituted from identified revenue sources and other 
receipts by NGAs or Public Officials or Employees acting as trustees, 
agents, or administrators for the fulfilment of commitments or 
accomplishment of specified purposes. Trust Funds shall be deposited in 
the TSA;
(b) 
Revolving Fund - constituted from receipts derived from business-type 
activities of NGAs to be used for the operating requirements of said 
business-type activities and are considered self-perpetuating and self- 
liquidating. Revolving Funds shall be deposited in the TSA or in an 
Authorized Government Depository Bank (AGDB) upon authority of the 
National Treasurer; and
(c) 
Retained Fund - constituted from taxes, fees, charges, penalties, income, 
dividends, or interest earnings collected, cared or received by NGAs which 
are expressly authorized by law to be retained by NGAs and utilized for 
specified purposes. Retained Funds shall be deposited in the TSA or in an 
AGDB upon authority of the National Treasurer.
Any interest earned by Special Funds shall accrue to the General Fund unless 
otherwise authorized by law.
SEC. 32. Review by the Permanent Committee. - Upon the effectivity of this Act 
and every three years thereafter, the Permanent Committee shall review all existing 
SAGF's and Special Funds to validate their compliance with the requirements under 
Sections 46 and 47 and to determine whether these Funds should be modified, 
terminated, or continued. The Permanent Committee shall recommend for the approval 
of the President, the modification or termination of any of the said funds based on any 
of the following grounds: (i) when there is no legal basis for its creation; (ii) when its 
terms have expired; (iii) when the purpose for its creation has been attained or no 
longer exist, (iv) when it is no longer necessary for the attainment of the purposes for 
which said Funds were established; (v) when needed by the General Fund in times of 
calamities and emergencies; (vi) when it is used in violation of the rules and regulations 
issued by the Committee; or (vii) when they have remained dormant for an 
unreasonable length of time.
The Permanent Committee shall issue guidelines for the establishment, review 
and evaluation, accounting and reporting, and termination of SAGFs and Special Funds.
SEC. 33. Escrow Fund. - Escrow Funds are constituted from funds for which the 
government's legal right to use is contingent upon a future event which may or may
17


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
not occur. Escrow Funds shall be deposited in the TSA or an AGDB upon authority of 
the National Treasurer. Any interest by an Escrow Fund shall accrue to the said Fund. 
The amounts under escrow, including interest earned shall form part of the General 
Fund upon the occurrence of the future contingent event.
SEC.34. Waiver, Abatement, Refund and Compromise Agreements. - No public 
official shall waive, abate, refund, or enter into a compromise agreement on a tax 
liability or the payment of fees or charges except in accordance with law. All waivers, 
abatements, refunds or compromise agreements made by an NGA shall be properly 
accounted for and reported. Refund of taxes and other revenues shall be treated as a 
reduction in current year's revenue collections for budgeting and fiscal reporting 
purposes.
SEC. 35. Grants. - NGAs may accept, upon prior coordination with the DOF, in 
cash or in kind, from domestic sources, for purposes relevant to their functions. In the 
case of grants, in cash or in kind, from foreign sources or from governments of foreign 
countries, their agencies and instrumentalities and international or multilateral 
institutions or organizations, acceptance thereof shall be subject to the prior clearance 
and approval by the President or the President's authorized representative, based on 
the recommendation of the Secretary of Finance and the Secretary of Foreign Affairs.
The provisions of this Section shall not apply to: (1) any grant received by LGUs 
or GOCCs, except where the grant is received by them on behalf of the National 
Government (NG); or (2) any grant authorized or covered in accordance with existing 
law.
Grants received shall be valued, in the case of grants received in kind, and 
recognized on the books of the recipient agency of the National Government.
SEC. 36. Treasury Singie Account (TSA). - The TSA refers to the banking 
arrangement managed by the BTr wherein the government transacts all monies 
collected, received or paid by NGAs in one bank account or a set of linked bank accounts 
and gets a consolidated view of its cash position on at least, a daily basis.
The TSA shall cover remittances, releases or disbursements from the General 
Fund, SAGFs, Special Funds, Escrow Funds, Letters of Credit and any other fund 
managed by the BTr, except in any of the following instances:
(a) 
When monies under the General Fund are placed under investments;
(b) 
When the BTr is required to hold foreign currency accounts; or
(c) 
When authorized by the Secretary of Finance.
18


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
The BTr, in coordination with NGAs authorized by law to undertake revenue 
collection and administration, shall make the necessary arrangements with authorized 
agent banks (AABs) to facilitate the collection and transfer of said revenues to the TSA. 
AABs shall deposit said collections to TSA within the period and in the manner prescribed 
by laws, rules and regulations.
SEC. 37. Oversight on Government Bank Accounts. - Notwithstanding any 
provision of law to the contrary, the BTr shall undertake any of the following in case of 
violation of a provision in this Act and guidelines issued on the implementation of the 
TSA:
(a) 
Transfer balances of bank accounts to the TSA;
(b) 
Close any bank account; and/or
(c) 
Revoke the authority to open any bank account.
The government agency which has opened a bank account, as well as the bank 
concerned shall promptly disclose information regarding such account to the BTr.
SEC. 38. Treasury Cash Management. - The BTr shall issue orders for the 
conduct of cash management including the requirement to provide projections on the 
timing of future transactions of NGAs taking into consideration that the appropriations 
law is considered the authority of the agencies to contract out and disburse funds, 
except for those instances stated in Section 35 of this Act.
SEC. 39. Investments. - The BTr may invest portions of the funds held in the 
TSA for such periods as the BTr may deem prudent considering cash management 
requirements. Investments are authorized to be made in any of the following:
(a) 
Bank deposit with any highly reputable bank following a selection criteria 
to be issued by the BTr and money market instruments with well recognized and 
established financial institution;
(b) 
Sovereign-issued securities with an investment grade rating; or
(c) 
Other fixed income securities with an AAA credit rating issued by at least 
two (2) reputable international credit rating agencies.
The BTr may appoint a fund manager as an agent of the National Government 
to undertake the investment of the funds. Fund Manager refers to person responsible 
for implementing a fund's investing strategy and managing its portfolio trading 
activities.
19


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
Interest earned and other income from investments shall accrue to the General 
Fund, unless otherwise provided by law.
SEC. 40. Management of National Government Borrowings. - Borrowings by the 
National Government shall be for purposes provided by law including any of the 
following:
(a)
(b)
(c)
(d)
(e) 
(0
(g)
Financing budget deficits and liquidity shortfalls;
Refinancing and pre-financing maturing debts;
Undertaking liability and risk management transactions;
Supporting the BSP in maintaining external and monetary stability; 
On-lending to an approved entity;
Financing all sums of money paid to fulfill guarantees;
Increasing liquidity and promoting stability of the government securities
market;
(h) 
Financing developmental activities and projects of the National 
Government;
(i) 
Providing financing to address or remedy the effects or impacts of natural 
or human- induced disasters; or
(j) 
Defraying expenditures covered by appropriations.
Borrowing under this Act should adhere to the Fiscal Responsibility Principles and 
measurable fiscal objectives in the Statement of Fiscal Policy.
SEC. 41. Borrowings by Government -Owned or -Controlled Corporations. - 
Before the end of each Fiscal Year, the Flead of a GOCC shall prepare a borrowing 
program for the following Fiscal Year which shall support the COB and for the medium 
term. Both borrowing programs shall include a full financial plan with the details of the 
loans, refinancing and repayment that the GOCC intends to take. Said borrowing 
program, including changes thereon, shall be subject to the approval of the Flead of the 
NGA overseeing the GOCC, shall be submitted to DOF for information, and published in 
the concerned GOCC website.
20


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
GOCCs shall seek DOF approval and monetary board concurrence for foreign 
borrowings or the latter's opinion for domestic borrowing activities as provided in the 
IRR.
Nothing in this Section shall be construed as creating a government guarantee 
on any borrowing, loans or refinancing and repayment that the GOCC intends to take.
SEC. 42. Local Government Borrowings. - An LGU may borrow funds from 
domestic sources in accordance with the Local Government Code of 1991 and other 
applicable laws. LGUs may also be allowed to access foreign sources for major 
infrastructure projects, through multilateral financial institutions, subject to the 
guidelines to be issued by the DOF.
LGUs shall develop their borrowing programs, as part of their comprehensive 
development and annual investment plans, which shall be published in the LGU website.
SEC. 43. Debt Reporting. - The DOF, through the BTr, shall ensure that the 
records include information on the principal, terms of repayment, amounts drawn, 
interests, penalties and service charges accrued, principal and interests paid, and the 
balance outstanding, and shall make the records available in a timely way to the 
President, Congress, and COA and in accordance with the reporting requirements in this 
Act.
Each LGU and GOCC shall maintain records and provide reports to the DOF on 
loans as required by relevant laws, rules and regulations.
SEC. 44. Debt Audit - Upon the effectivity of this Act, the COA shall conduct a 
debt audit of all loans contracted or guaranteed by the National Government. For those 
loans contracted or guaranteed after the passage of this Act, the COA shall review the 
said loans five (5) years from the date of consummation or guarantee.
SEC. 45. Guarantees. - Guarantee, indemnity or security shall be provided to 
an NGA or a GOCC, as provided by law, and upon such terms and conditions as the 
Secretary of Finance may recommend consistent with relevant laws, rules and 
regulations. The overall level of guarantee, indemnity or security shall adhere to the 
Fiscal Responsibility Principles laid down in this Act and the fiscal objectives in the 
Statement of Fiscal Policy.
The DOF shall charge a risk-based fee for any guarantee, indemnity, security, 
relending or similar financial accommodation it may extend to a GOCC.
In no case shall the National Government be liable for any borrowing by any 
agency of the government except for explicit guarantees as provided by law.
21


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
SEC. 46. Limitation on the Liability of the National Government for Debts of 
Other Entities. — The National Government shall not be liable for any implied guarantee 
asserted by any person or entity, but only for explicit guarantees extended in 
accordance with existing laws, and guarantees in favor of the Government Service 
Insurance System, Home Development Mutual Fund, Philippine Health Insurance 
Corporation, and the Social Security System in their respective charters.
SEC. 47. Payments Made for Contingent Liabilities. - Any money paid by the 
DOF pursuant to any guarantee, indemnity, or security authorized by law and the 
expenses associated with the same shall constitute a debt due the National Government 
from the entity for whose benefit the payment on the guarantee, indemnity, or security 
was made.
SEC. 48. Information on Contingent Liabilities. — The DOF shall keep a 
complete and updated registry of all contingent liabilities of the National Government, 
and provide the DBM and Congress with a report on contingent liabilities. Subject to 
existing laws, rules, and regulations, the DOF shall have the power to compel any 
national government agency and instrumentality, including GOCCs, to submit 
documents and other pertinent information necessary for the completion of such 
registry.
Chapter 4
Accountability and Reporting
SEC. 49. Financial Management and Internal Control. — The Head of Agency 
shall be responsible and accountable for the financial management of the agency which 
shall include meeting performance targets, controlling costs, mitigating adverse risks to 
agency operations, and ensuring that budgets are managed with integrity and in 
compliance with applicable laws. Adequate internal controls shall be ensured, while an 
internal audit function shall be maintained, as may be applicable.
SEC. 50. Integrated Financial Management Information System. — There shall 
be an integrated financial management information system (IFMIS), which shall be the 
single portal of all financial transactions and reports to be used by NGAs, GOCCs and 
LGUs to integrate budgeting, cash management and accounting processes.
The IFMIS shall be managed by the National Accounting and Finance Office 
under the DBM, which was established under EO No. 292, s. 1987, to take charge of 
the maintenance of the data bank of financial information and to provide the necessary 
data required by the President, fiscal agencies and international financial institutions, 
analyze and evaluate the accounts and overall financial performance of the government, 
and supervise the management of the accounts of government agencies and 
instrumentalities.
22


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
The development and implementation of IFMIS shall be in coordination with 
other key oversight agencies, that is, DOF and COA, and in accordance with EO No. 55, 
s. 2011, directing the integration and automation of government financial management 
systems.
Electronic and digital authorizations within the IFMIS including, but not limited 
to, certification on availability of fund as well as general and application information 
technology (IT) controls done through, and resulting in, the implementation of IT 
systems shall be valid for all legal intents, as well as for auditing purposes.
SEC. 51. NGA Annual Plans and Proposed Budgets. — The Flead of each NGA 
shall produce an Annual Plan which shall have a medium term scope, with details for 
the following Fiscal Year, and shall include information on the strategic priorities for the 
medium-term, both the national and regional level, consistent with the Philippine 
Development Plan; performance information; summary proposed budget including 
financial forecast assumptions and highlighting significant capital projects; and other 
information as required in the IRR, as well as the Budget Call and other related 
issuances from the DBM. The Annual Plan shall be submitted to DBM during the budget 
preparation process consistent with the timetable and other guidelines in the Budget 
Call.
The Annual Plan of a Department shall incorporate the Annual Plans of its 
attached NGAs and GOCCs subject to guidelines prescribed in the IRR.
SEC. 52. Submission of Post Fiscal Year Budget Status. - The DBM shall submit 
to the Speaker of the Flouse of Representatives, the President of the Senate of the 
Philippines, the House Committee on Appropriations and the Senate Committee on 
Finance a post Fiscal Year budget status report not later than May 31 of the current 
year.
SEC. 53. Internal Audit Standards. - The Commission on Audit shall formulate 
and issue the guidelines and standards for internal audit in the NGAs, GOCCs and LGUs.
Chapter 5
Transparency and Participation
SEC. 54. People's Access to Public Financial Information. - Before the start of 
each Fiscal Year, the DBM shall promulgate a Calendar of Disclosures, and shall publish 
this on the government website. Such calendar shall contain the schedule of release of 
all budget documents and information required by this Act and its IRR. The DBM shall 
monitor and periodically report to Congress and the public on the compliance of 
agencies with the Calendar of Disclosures and other fiscal transparency requirements 
under this Act and its IRR.
23


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
All documents and reports required to be published by this Act and its IRR shall 
automatically be made available electronically in the government website. Current and 
historical data on government revenues, expenditures, and borrowings, shall be made 
available electronically, in open data format, on the government website, subject to 
guidelines established in the IRR.
SEC. 55. The People's Budget -The DBM shall, for every Fiscal Year, publish 
citizen-friendly summaries of the following, subject to guidelines and other 
specifications in the IRR:
(a) 
The Statement of Fiscal Policy in the year of the President's election and 
any updates thereafter within thirty (30) days from submission to Congress;
(b) 
The Proposed National Budget, to be published in electronic format within 
thirty (30) days from submission to Congress of the Proposed National Budget;
(c) 
The annual GAA and special appropriations laws, to be published in 
electronic format in the government website within thirty (30) days from its effectivity; 
and
(d) 
The Annual Fiscal Report of the preceding fiscal year, to be published in 
electronic format in the government website on the last working day of the current 
year.
5EC. 56. Participatory Budget Process. - The government shall establish and 
implement suitable participatory budget mechanisms to facilitate the open, inclusive, 
and meaningful engagement of citizens throughout the budget process. The DBM and 
DILG, together with other relevant agencies, shall formulate policies and programs, 
activities, and projects to enhance participation in the planning, budgeting and 
accountability processes.
Such participatory mechanisms may include (i) consultations with the Local 
Development Councils in the formulation of the national and local government budgets; 
and (ii) partnerships with civil society organizations (CSOs), academic institutions and 
experts on programs that monitor and help improve agency or local government 
preparation, execution, and monitoring of the budget. Capacity development of CSOs 
to participate under the principles of constructive engagement with government may 
also be conducted.
Chapter 6 
Enforcement
5EC. 57. Sanctions and Penalties. -
24


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
(a) 
Without prejudice to the provisions of other laws, the following sanctions 
and liabilities in case of failure to comply with the reporting and posting requirements 
under this Act, shall be imposed:
1. 
The DBM shall not approve any request for release of allotments 
or any modification in the allotment nor recommend the use of savings by the 
President until such time as the non-compliant agency has submitted the report/s 
required under this Act;
2. 
The COA may suspend or disallow any expenditure due to 
modification in the allotment, which were made within the period succeeding the 
reporting period when the agency failed to comply with the reporting 
requirements under this Act;
3. 
Failure of the responsible officer to report on the income and/or 
funds retained at the end of a reporting period shall be considered a neglect of 
duty, subject to the penalty provided under existing laws; and
4. 
The Congress may motu proprio, through its appropriate oversight 
committee compel the head of the non-compliant agency, under pain of 
contempt, to produce the required report/s and to explain reasons for failure to 
submit and disclose said report/s.
(b) 
Without prejudice to the provisions of other laws:
1. 
Every contractual commitment, expenditure or payment authorized 
or incurred in violation of the provisions of this Act shall be void and shall render 
the Public Official or Employee authorizing or making such payment and every 
person in collusion with said official or employee shall jointly and severally be 
held liable to the government for the full amount so paid or received. The Public 
Official or Employee who knowingly delays the implementation of any contractual 
agreement shall be liable and imposed the appropriate administrative sanctions 
based on existing laws and civil service rules. A Public Official or Employee who 
knowingly incurs any contractual commitment or authorizes any expenditure in 
violation of the provisions of this Act or takes part therein shall likewise be 
removed or dismissed from office, after due notice and hearing, even if no 
criminal charge is instituted against such Public Official or Employee;
2. 
Any Public Official or Employee, holding office or employment in a 
casual, temporary, holdover, permanent or regular capacity, who shall cause the 
inclusion of fraudulent information in any accountability report, shall be penalized 
with imprisonment not exceeding five (5) years, or a fine not exceeding One 
Million Pesos (P1,000,000.00), or both, without prejudice to disallowances by the
25


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
COA against expenditures related to such fraudulent information, provided, that 
this fine is reviewed and adjusted periodically to be reasonable;
3. 
A conviction under this Act shall carry with it civil liability, which 
may either consist of restitution for the damage done or forfeiture in favor of the 
government of any unwarranted benefit derived from the act or acts in question, 
or both, at the discretion of the courts, in addition to possible administrative 
liability; and
4. 
Private individuals who shall conspire with the erring Public Officials 
or Employees, whether as co-principals, accomplices or accessories, in the 
commission of any violation of this Act shall be subject to the same penalties as 
the Public Officials or Employees and shall be tried jointly with them.
Chapter 7 
Final Provisions
SEC. 58. Implementing Rules and Regulations. - The DBM, in consultation with 
the DOF, BTr, NEDA and COA, and in coordination with agencies concerned, shall issue 
the rules and regulations necessary for the proper implementation of this Act within 
ninety (90) days from its effectivity. The IRR may be amended by the DBM, in 
consultation with the DOF, BTr, NEDA and COA and in coordination with the agencies 
concerned, as the need arises, and in accordance to the provisions of this Act.
SEC. 59. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, proclamation, charter, rule or 
regulation and/or parts thereof contrary to or inconsistent with the provisions of this 
Act is hereby repealed, modified or amended accordingly.
SEC. 60. Separability Clause. - If for any reason, any section or provision of this 
Act is declared unconstitutional or invalid, other sections or provisions which are not 
affected thereby shall continue to be in full force and effect.
SEC. 61. Effectivity Clause. - This Act shall take effect fifteen (15) days following 
its publication in the Official Gazette or in two (2) newspapers of general circulation.
Approved,
26