November 7, 2022
8:25 am
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REPUBLIC OF THE PHILIPPINES 
HOUSE OF REPRESENTATIVES 
QUEZON CITY 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. __________ 
Introduced by  
REPRESENTATIVE ATTY. GERVILLE “JINKY BITRICS” R. LUISTRO 
AN ACT TO REFORM THE BUDGET PROCESS BY ENFORCING GREATER 
ACCOUNTABILITY IN PUBLIC FINANCIAL MANAGEMENT (PFM), 
PROMOTING FISCAL SUSTAINABILITY, UPHOLDING CONGRESS' POWER 
OF THE PURSE, INSTITUTING AN INTEGRATED PEM SYSTEM, AND 
INCREASING BUDGET TRANSPARENCY AND PARTICIPATION 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. This Act shall be known as the "Budget Modernization 
Act." 
SECTION 2. Declaration of Policy. 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 light of 
these 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
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 to the
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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. 
 
SECTION 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. 
 
SECTION 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) Allotment 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 (PS), 
Maintenance and Other Operating Expenses (MOOE), Financial Expenses 
(FE), and Capital Outlays (CO);  
 
(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;  
 
(f) Cabinet refers to the Executive Secretary and the Secretaries of the 
Departments under the Executive Branch;  
 
(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 a 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 the Bureau of Internal Revenue (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 Year 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
(GFIs), government instrumentalities with corporate powers, government
corporate entities and related corporations;
(n) Government Financial Institutions (GFIs) 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 (LGUs) 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 
the Department of Budget and Management (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 (12) months;  
 
(t) National Government Agencies (NGAs) 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;  
 
(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. 
 
 
PART II 
BUDGET PREPARATION, EXECUTION, AND ADJUSTMENT 
 
SECTION 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: 
 
(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. 
 
SECTION 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 
(RDIP) 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. 
 
SECTION 7. Budget Priorities Framework. The DBCC shall submit to the President 
and Cabinet, within April 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. 


 
 
SECTION 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. 
 
SECTION 9. The Proposed National Budget. The President shall submit to 
Congress, not later than thirty (30) days from the fourth Monday of July of every 
year, 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;  
 
(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 (PPPs), 
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 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. 
 
SECTION 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. 
 
SECTION 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. 
 
SECTION 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. 
 
  
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 
Spill-Over 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 
(NDRRMC) for local disasters and calamities and the appropriate agency for 
international crises. 
 
SECTION 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. 
 
  
The DBM shall inform Congress of all releases from the Contingent Fund in 
the quarterly and annual fiscal reports including information on the date of release, 
the amount covered, corresponding purpose/s and recipient agency. 
 
SECTION 14. 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. 
 
SECTION 15. 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 GA 
that 
requires 
implementation 
during 
the 
year. 
The 
Unprogrammed 
Appropriations shall indicate the purposes from which the amount authorized 
therein may be used. The Unprogrammed 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. 
 
SECTION 16. 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. 
 
SECTION 17. 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;  
 
(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 LGUs, 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. 
 
SECTION 18. 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. 
 
  
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. 
 
SECTION 19. 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. 
 
SECTION 20. 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. 
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 financial subsidies to LGUs, reversion shall be made to the National Treasury after 
the end of the succeeding Fiscal Year. 
 
SECTION 21. 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. 
 
SECTION 22. Multi-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 LGUs, 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 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 cash 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 Government Procurement Policy Board (GPPB) guidelines. 
 
SECTION 23. 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 GPBB. 
 
  
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. 
 
SECTION 24. 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. 
 
SECTION 25. 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 CSC, the 
Commission on Elections, and the Commission on Audit (COA) 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. 
 
SECTION 26. 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. 
 
SECTION 27. 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. 
 
SECTION 28. 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 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. 
 
 
PART III  
FINANCIAL MANAGEMENT 
 
SECTION 29. 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. 
 


 
SECTION 30. 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: 
 
(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. 
 
SECTION 31. 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 foregoing 
requirements under Sections 45 and 46 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; 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 (vi) 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. 
 
SECTION 32. 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 
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. 
 
SECTION 33. 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. 
 
SECTION 34. Grants. NGAs may accept, upon prior coordination with the DOF 
and the Department of Foreign Affairs, grants, in cash or in kind, from domestic or 
foreign sources, for purposes relevant to their functions. In the case of grants, in cash 
or in kind, 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. 
 
SECTION 35. Treasury Single 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. 
 
  
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. 
 
SECTION 36. 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. 
 
SECTION 37. 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. 
 
SECTION 38. 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. 
 
  
Interest earned and other income from investments shall accrue to the 
General Fund, unless otherwise provided by law. 
 
SECTION 39. Management of National Government Borrowings. Borrowings by 
the National Government shall be for purposes provided by law including any of 
the following: 
 
(1) Financing budget deficits and liquidity shortfalls;  
(2) Refinancing and pre-financing maturing debts;  


 
(3) Undertaking liability and risk management transactions;  
(4) Supporting the BSP in maintaining external and monetary stability;  
(5) On-lending to an approved entity;  
(6) Financing all sums of money paid to fulfill guarantees;  
(7) Increasing liquidity and promoting stability of the government securities 
market;  
(8) Financing developmental activities and projects of the National 
Government;  
(9) Providing financing to address or remedy the effects or impacts of natural 
or human-induced disasters; or  
(10) 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. 
 
SECTION 40. Borrowings by Government -Owned or -Controlled Corporations. 
Before the end of each Fiscal Year, the Head 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 Head of the NGA overseeing the GOCC, shall be submitted to DOF for 
information, and published in the concerned GOCC website.  
 
  
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. 
 
SECTION 41. 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. 
 
SECTION 42. 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. 
 
SECTION 43. 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. 
 
SECTION 44. Guarantees. Guarantee, indemnity or security shall be provided to an 
NGA or a GOCC as provided by law, and subject to the annual guarantee ceiling 
prescribed in the GAA, 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. 
 
SECTION 45. 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 (GSIS), Home Development Mutual Fund (HDMF), Philippine 
Health Insurance Corporation (PhilHealth), and the Social Security System (SSS) in 
their respective charters. 
 
SECTION 46. 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. 
 
SECTION 47. 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. 


 
PART IV 
ACCOUNTABILITY AND REPORTING 
 
SECTION 48. 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. 
 
SECTION 49. Integrated Financial Management Information System (IFMIS). 
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. 
 
  
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. 
 
SECTION 50. NGA Annual Plans and Proposed Budgets. The Head 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. 
 
SECTION 51. Submission of Post Fiscal Year Budget Status. The DBM shall submit 
to the Speaker of the House 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. 
 
SECTION 52. Internal Audit Standards. The DBM shall formulate and issue the 
guidelines and standards for internal audit in the NGAs, GOCCs and LGUs. 
 
 
PART V  
TRANSPARENCY AND PARTICIPATION 
 
SECTION 53. Shared Fiscal Discipline. All proposed revenue eroding and 
expenditure bills shall include a Financial and Budgetary Information Sheet upon 
filing of the bill. The said information sheet shall contain an estimate of the financial 
and budgetary implications of said proposal for the initial year of implementation. 
Expenditure bills refer to those which increase National Government expenditures, 
including those mandating the creation of recurring expenditures; while revenue 
eroding bills refer to those which will result in a reduction of revenue collections. 
 
  
Each House of Congress shall provide guidelines prescribing the form, content 
of the Financial and Budgetary Information Sheet, as well as the appropriate offices 
from which such information shall be acquired, and the implications of non- 
compliance with said submission. 
 
SECTION 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. 
 
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. 
 
SECTION 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. 
 
SECTION 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.  
 
 
PART VI  
ENFORCEMENT 
 
SEC. 57. Sanctions and Penalties. - 
 
(i) 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: 
 
(a) 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;  
 
(b) 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;  
 
(c) 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  
 
(d) 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. 
 
(ii) Without prejudice to the provisions of other laws: 
 
(a) 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;  
 
(b) 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 
COA against expenditures related to such fraudulent information, 
Provided, that this fine is reviewed and adjusted periodically to be 
reasonable;  
 
(c) 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  


 
 
(d) 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. 
 
 
PART VII  
FINAL PROVISIONS 
 
SECTION 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 the effectivity of this Act. 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. 
 
SECTION 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. 
 
SECTION 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. 
 
SECTION 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,