Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNO. 2904

Introduced by
Hon, FERDINAND MARTIN G. ROMUALDEZ, Hon. GLORIA MACAPAGAL,
ARROYO, Hon. DIOSDADO M. ARROYO, HON. JOSE L. ATIENZA, Jr., HON.
JONATHAN A, DE LA CRUZ, Hon. VICTOR FRANCISCO C. ORTEGA, Hon, PHILIP
A. PICHAY, Hon. LAN] MERCADO-REVILLA, Hon. ALETA C. SUAREZ and Hon.
TOBY M. TIANGCO

EXPLANATORY NOTE

The power of the purse is vested in the Congress of the Philippines. Such power
has been explicitly given by no less than the Constitution.

Thus, when the President for whatever reason refuses to spend funds made
available by Congress in the exercise of its impoundment power, the President is
frustrating the will of Congress.

While we recognize the corollary doctrines of separation of powers and checks
and balances, we believe that the Executive and the Legislative Departments should
create safeguards to avoid abuses of power. After all, in a democracy, no department
exercises unbridled and limitless power

This bill seeks to increase congressional oversight and limit executive influence
Over specific appropriations in the General Appropriations Act in recognizance of their
defined powers under our Constitution

Hence, the approval of this bill is earnestly sought.


SA
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VICTOR FRANCISCO C. ORTEGA

1st District, La Union

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LANIMERCADO- REVILLA
2nd District, Cavite

TOBY M. TIANGCO
Lone District, Navotas

1 District, Leyte

SE L.\ATIENZA,

CUHAY Partie

‘st District, Surigao de Sur

yo? heer ,
ALETA C. SU,
‘d District, Quezon

GLORIA MAGAPAGAL - ARROYO
2nd District, Pampanga

ie |. ARROYO
2” District, Camarines Sur

JONATHAN A. DE LA CRUZ
ABAKADA Partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2904

Introduced by
Hon. FERDINAND MARTIN G. ROMUALDEZ, Hon. GLORIA MACAPAGAL
ARROYO, DIOSDADO M. ARROYO, HON. JOSE L. ATIENZA, Jr., HON.
JONATHAN A. DE LA CRUZ, Hon. VICTOR FRANCISCO C. ORTEGA, Hon. PHILIP
A, PICHAY, Hon. LANI MERCADO- REVILLA, Hon. ALETA C. SUAREZ and Hon.
TOBY M. TIANGCO.

THE BUDGET IMPOUNDMENT CONTROL ACT

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

assembled.

Section 1. Title. This Act shall be known and cited as “The Budget
impoundment Control Act.”

Sec. 2. Declaration of Policy. It is hereby declared the policy of the State to
formulate and implement a National Budget that is an instrument of national
development, reflective of national objectives, strategies and plans. 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.


Sec. 3. Definition of Terms. For purposes of implementing this Act, the

following definitions shall apply:

(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.

(c) Deferral of releases - means with holding 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

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

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

Sec. 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 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:


4. The amount of budget appropriation which he proposes to be rescinded or
which is to be reserved;

2. Any account, department, agency o 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.

Sec. 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 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) days 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.

Sec. 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.

Sec. 7. Deferral of Releases.

(a) Whenever the President, the Secretary of the Department 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 specifying:

4.) 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, 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.

Sec, 8. Approval of Release of Deferral. 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) days 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.

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

The Committee on Appropriations of the House of Representatives and the
Committee on Finance of the Senate shall conduct public hearings and call on the
head/s of the departments, agencies and corporations for a thorough and detailed
quarterly report .


Sec. 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 current fiscal 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.

Sec. 11. Penal Provision. Any violation of Sections 2,4,5,6,7,8, and 9 of this
Act shall be punished by a fine not exceeding Five Hundred Thousand Pesos
(Php500,000,00) and the penalty of perpetual special disqualification

Sec. 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.

Sec. 13. Effectivity Clause. This Act shall take effect fifteen (150 days after its
publication in the Official Gazette or in at least two (2) newspapers of general

circulation.

Approved.

‘ |
Leute - JALDEZ DIOSDADOM. ARROYO

1" District, Leyte 2" District, Camarines Sur

JONATHAN A. DE LA CRUZ
ABAKADA Partylist

SE L.\ATIENZA,


VICTOR sonic v onan
1st District, La Union

re ae
IERCADO- REVILLA

2nd District, Cavite

TOBY M. TIANGCO
Lone District, Navotas

trict, Surigao de Sur

,
yo bhte

Al tne, suahez

District, Qtezon

PHIL
41st Di

GLORIA MAGAPAGAL - ARROYO
2nd District, Pampanga