THIRTEENTH CONGRESS OF THE REPUBLIC) 
First Regular Session 
OF THE PHILIPPINES 
1 
. .  
Introduced by Senator Juan M. Flavier 
EXPLANATORY NOTE 
This bill proposes to establish a procedure for controlling executive 
impoundment of funds. 
In the 1992 budget program of P334.55 billion, only P270.63 billion was 
released during the year. P63.92 billion or about 20% program was impounded 
and not released. 
In 1993, similar non-release or impoundment of funds have delayed 
and/or terminated the initiation and completion of critical and vital infrastructure 
and capital investments. 
To ensure immediate and timely implementation of government program 
and projects and minimize delays and wastage, we urge the early passage of this 
bill. 
R 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
First Regular Session 
OF THE PHILIPPINES 
1 
S E N  
S. NO. 
, ,  . 
Introduced by Senator Flavier 
THE BUDGET IMPOUNDMENT CONTROL ACT 
Be it enacted by the Senate and the ffouse of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Title. - This is Act shalt 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deferred, rescinded, reserved, or otherwise provided in the General 
Appropflations Act, shall be automatically released within the first semester of the 
year through the issuance of advims 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 uf Terms. - For purposes of this Act: 
Rescission - means cancellation of ali or part of an enacted 
appropriation, which has not yet been spent or obligated. 
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, 
Impoundment resolution - means a joint resolution of both Houses of 
Congress expressing its disapproval of a rescission, reservation or 
deferral of an appropriation or several appropriation items as proposed 
by the President. 
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. 
Work-and-financial plan - the monthly breakdown of financial 
requirements and physical performance targets of an agency. 
Appropriations - unless othewise 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 sf 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 
authorized 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: 
I) 
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 governmentai 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/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 proceed with the rescission/reservation 
procedures: P mvided, That 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 8s 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 shalf 


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 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 to 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 Deferrai. - Both Houses of Congress 
shall act on the proposed deferral within sixty (60) 
calendar days after the receipt 
of the proposal from the President: Pmvided, That if tha 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 bO 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 PreSid8nt shall proceed with the deferral 
procedures. 
SECTION 9. Submission of Quarterly Repo,rts. -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 resewed and deferred appropriations, and comparative statements 
showing the annual generai appropriations, the annuat program of continuing and 
automatic appropriations, and the corresponding releases of allotments and cash 
allocations for each department, agency, corporation and fund: Provided, That 
the releases from each fump-sum or special-purpose fund shall be supported 
with schedufes indicating ths specific departmentsjagencies, 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 IO. 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 one 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 a fine not exceeding One 
hundred thousand pesos (PI 00,000.00) 
and the penalty of temporary 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 (95) 
days after its complete publication in the Official Gazette or in at least two (2) 
national newspapers of general circulation, whichever comes earlier. 
Approved,